After its blazing performance on Tuesday, the US Dollar (USD) is not moving this Wednesday. A confluence of events, including weak import/export data from China. Reparked recession fears, and a 40% tax on profits for Italian banks, combined as a risk-averse cocktail. That fueled the Greenback rise in every major G10 pair. Because of the light economic calendar and the US Consumer Price Index (CPI) statistics on Thursday. Traders will be waiting on their hands. Wednesday so order to conserve energy for the big event.
On the economic front, the release calendar is minimal. With only the weekly Mortgage Applications figures expected. On the commodity front, the US Energy Information Administration (EIA) will provide Crude Oil and derivatives data. This announcement will be given extra attention because the Western Texas Intermediate (WTI) oil price went on a wild ride on Tuesday, falling 3.10% during the European session and then rebounding 4% during the US trading session.
US Dollar Technical analysis
On the US Dollar Index (DXY) chart, the US Dollar passed through a very difficult period. The area where the 100-day and 55-day Simple Moving Averages (SMA) are both present has been broken to the upside, undoubtedly inflicting pain on many US Dollar bears. With the US Dollar retreating somewhat on Wednesday, it will be interesting to watch if the 100-day SMA at 102.31 will keep the DXY from giving up all of its gains from Tuesday.
To the upside, the 55-day SMA at 102.45 is the next crucial level to have a daily close above in order to move steadily. Because this technical indication has already been breached below, it is missing purchasing interest. If the US Dollar Index can regain its footing, 103 and a new monthly high are on the way.
On the To avoid a complete reversal of earlier gains for the week, US Dollar bulls will try to defend the previously indicated 100-day SMA at 102.31. If the bulls fail to achieve so, expect a drop toward 102.00. Once reached, the recent low of 101.74 could represent a line in the sand indicating whether more decline is to come.
