US dollar is holding steady in advance of Jackson Hole; pound is falling on contraction worries. US 10-year rates fell 13 base percentage points to 4.198 percent
USD steadies after Wednesday’s fall
The US dollar held steady during morning European trade Thursday. Following falling yesterday as Treasury rates fell in the aftermath of dismal economic figures, before of the commencement of the annual Jackson Hole Colloquium.
The DXY, which monitors the dollar a was 0.1 percent higher at 103.427 at (07:20 GMT), after losing approximately 0.2 percent on Yesterday.
Key Points
The index appears to be modestly bid around the middle-103.00s.
The focus of trading has shifted to the Jackson Hole spectacle.
Durable Goods Orders and weekly Claims are following on the agenda.
compared to the value of the USD Index, the dollar reclaims a certain equilibrium and returns to the 103.50 zone on Thursday.
The index regains some of its serenity and succeeds to catch up with Wednesday’s significant fall. Amidst increased expectations before towards the Jackson Hole Symposium with Fed Chairman J. Powell’s address on Friday.
The dollar’s rebound is due to an absence of traction in US rates along the curve. That looks may have mitigated the weekly loss slightly. Given market members’ continued support for the Fed’s hardline-for-longer term approach.
The Current Scenario
The dollar index appears to have entered a period of consolidation near the top of the spectrum. After fresh several-week highs above 104.00 of (August 23) levels.
Meanwhile, the solid state of the US economy continues to underpin the US currency. And appears to have partially revived the argument surrounding the Fed’s stricter-for-longer posture.
Moreover, the notion that the U.S. dollar might suffer challenges as a result of the Fed’s data-specific mindset. Versus the present background of sustained deflation and a weakening job market looks to be lacking ground.
US dollar Technical Perspective
The index is currently up 0.11 percent at 103.47, with a breach of 103.98 (month’s top August 23). Opening the way to 104.69 mark of (monthly peak reached at May 31). Then eventually 105.88 (2023 peak touched at March 8). On the contrary hand, immediate protection comes around 103.13 (200-day SMA). Following 102.30 (55-day SMA), followed by 101.74 (month’s bottom made on August 4).
Support (S) & Resistance(R) Levels
S3 – 99.1 S2 – 99.1 S1- 100.138. R1- 103.637 R2-103.637 R3 – 105.489
DXY Daily Chart
Source: TradingView
Final Thoughts
More signs of monetary deterioration beyond the US, in Asia and Europe. As well as current bond yield spread moves in towards the US, could provide additional backing for the US Dollar over the short term.
