The USD rises versus most other currencies.
The US Dollar (USD) is cooling off following a stunning performance versus various currencies earlier this Friday. When it benefitted from significant safe haven inflows. The risk-off mood was fueled by comments from US Treasury Secretary Janet Yellen. Who stated that recession is still a possibility as long as the Federal Reserve (Fed) tightens policy. Disappointing Purchase Manager Index (PMI) statistics from France and Germany simply added fuel to the already raging fire. And recent US PMI numbers demonstrate. That the Fed cannot abandon its current hawkish position. As the Services PMI remained elevated at 54.1. Services continue to be the largest contribution to the Fed’s need to address sticky core inflation. in order to keep inflation at 2%.
Next week, the spotlight will move to the retail sector to assess where the US Dollar will go. As Durable Goods Orders will be released at 12:30 GMT on Tuesday. The next day, on Wednesday, markets may receive more direction from Fed Chairman Jerome Powell. A day before the release of the US Gross Domestic Product (GDP) on Thursday. The Personal Consumption Expenditure (PCE) Price Index is scheduled to be released at 12:30 GMT to round off the week in all beauty.
US Dollar Technical analysis
The US Dollar surprised to the upside on Friday. After being on the back foot for the majority of the week. The biggest swings to highlight are USD/NOK up 2.16+%. And USD/PLN about 1.06%, with the Norwegian Krone particularly notable since the Norwegian Central Bank issued a 50-basis point surprise raise. On Thursday and is presently being killed versus the Greenback. This contributes to the US Dollar Index (DXY) breaking out in the Asia-Pacific and European sessions.
On the plus side, the 100-day Simple Moving Average (SMA) temporarily hit 103.07, causing a small intraday decline. Though the advance is quite optimistic for the DXY, the danger is a technical rejection against the 100-day SMA, with a retreat into the US session. It would be ideal to see a closing above the 100-day SMA in order to consolidate current gains. The biggest swings to highlight are USD/NOK up 2.16+% and USD/PLN about 1.06%, with the Norwegian Krone particularly notable since the Norwegian Central Bank issued a 50-basis point surprise raise on Thursday and is presently being killed versus the Greenback. This contributes to the US Dollar Index (DXY) breaking out in the Asia-Pacific and European sessions.
On the downside, the 55-day SMA around 102.60 could revert to support after being breached numerous times in recent weeks by both upside and downward swings. Still, the fact that this moving signal has been split up so much may diminish its significance. Rather, expect Thursday’s high of 102.46 to serve as a floor, or 102.00 to serve as a psychological level.
