After Tuesday’s drop, the US dollar has resumed its decline.
The US Dollar (USD) has returned to the red following a brief rally on Tuesday. The US Dollar’s safe-haven attraction looks to be dwindling as market sentiment improves. Wall Street’s main indexes began in positive territory on Wednesday, driven by a more-than-1% advance in the tech-heavy Nasdaq Composite Index. As investors hailed Microsoft and Alphabet’s better-than-expected profits.
However, concerns over the US debt ceiling remain, as do banking sector issues. As investors prepare for the publication of top-tier US statistics. Later in the American session, earnings from the US tech firm Meta will also be watched.
This week’s top-tier economic statistics and tech results from the United States will have an impact on USD value.
On the macroeconomic front, the first-quarter GDP and April Personal Consumption Expenditures (PCE) Price Index will be released. This week’s second half will be keenly scrutinized.
The US Dollar Index, which measures the performance of the US dollar against a basket of six major currencies, fell more than 0.5% on Wednesday, finishing at 101.00.
US Dollar Technical Outlook
The US Dollar Index (DXY) is falling after failing to break through the 102.00 critical barrier. Tuesday’s bounce from the weekly low is fading as sellers reclaim control.
The bearish 21-Day Moving Average (DMA), presently at 101.89, has kept bullish efforts at bay. On a daily candlestick closing basis, the index has failed to finish above the 21 DMA since March 15.
The 14-day Relative Strength Index (RSI) is trending south and below the midpoint, validating the ‘sell on rise’ trades that have been observed. The US Dollar Index. The DXY has already fallen below the previous day’s low of 101.19, and it is expected to challenge bullish commitments at 101.00. A further slide towards 100.00 will seek confirmation from the multi-month low of 100.78 set on April 14.
Acceptance over the 21 DMA will very certainly start a new upswing towards the 102.50 psychological barrier, after which the junction of the downward-sloping 50 and 100 DMAs at roughly 103.25 will be on buyers’ radars.
