US dollar is aiming for its best two-week showing since September. Demand increased by debt ceiling deal wagers, and jobless claims statistics.
US dollar headed towards biggest 2-week rise expected since September
On Thursday, the US Dollar surged higher, continuing a recent winning streak. The Dollar Index is gained around 2.2% in the last two weeks. Since September 2022, these 10 days represent an outstanding performance. We’ll examine the previous 24 hours in more detail and discuss what to anticipate for the rest of the week.
Reports that Capitol Hill lawmakers are drafting plans to vote soon on a compromise to extend the debt ceiling. Opening the possibility to preventing a default, circulated throughout Thursday’s Wall Street session.
Naturally, the yield on the 2-year Treasury note has increased by 8.5% during the last two weeks. Which is also the highest showing for that time period until September 2022. Rising short-term bond rates might be seen as an indicator of growing optimism about the US economy.
The US Labor Market Data still Strong
In the meanwhile, recent information on the labor market indicated hints of progress. Initial unemployment claims surprisingly decreased last week to 242k. Economic experts anticipated a 251k gain. Nevertheless, both figures are lower than the prior +264k estimate.
As a consequence, financial markets kept pricing in Fed rate decreases in the near future. Despite the job market’s ongoing tightness and persistently high inflation. Nearly two rate reductions have been removed from the projection in the past week (from previous Wednesday).
The US Dollar gained momentum perhaps as a result. All eyes will be on an address made by Chair Jerome Powell and former Chair Bernanke during a policy panel. As we approach the last 24 hours. If the latter keeps reducing betting on a short-term Fed rate drop, the USD could keep up its strong climb with more vigor.
Technical Analysis of the US Dollar/DXY
DXY has above the 100-day Simple Moving Average (SMA) on the daily graph. This has made the 105.88 top from March visible. If the positive trend is confirmed, this may pave the way for a brief rise in price. The area down under, from 100.82 to 101.79, offers crucial support.
Technical Indicators
May 19, 2023 05:21AM GMT
| Name | Value | Action |
|---|---|---|
| RSI(14) | 65.837 | Buy |
| STOCH(9,6) | 73.536 | Buy |
| STOCHRSI(14) | 100.000 | Overbought |
| MACD(12,26) | 0.280 | Buy |
| ADX(14) | 18.142 | Neutral |
| Williams %R | -2.233 | Overbought |
| CCI(14) | 146.3198 | Buy |
| ATR(14) | 0.5516 | Less Volatility |
| Highs/Lows(14) | 1.1529 | Buy |
| Ultimate Oscillator | 66.530 | Buy |
| ROC | 1.577 | Buy |
| Bull/Bear Power(13) | 1.9460 | Buy |
|
Buy: 8 Sell: 0 Neutral: 1 Summary:STRONG BUY |
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