US dollar remains stable on Friday as markets resume following Thanksgiving.
The US Dollar (USD) is starting to spring to life as markets digest the Thanksgiving turkey. One thing to keep in mind is that US yields are rising while bond prices are falling, with the benchmark US 10-year note rising from 4.40% on Wednesday’s close to 4.4% on Friday’s opening price. Traders will be on the watch for some significant US statistics right at the start of Black Friday. The US Dollar Index’s (DXY) position might be made or broken by the conclusion of this week.
US traders are bracing for the import of US PMI data.
This Friday will be all about the preliminary November Purchasing Managers Index number. The significance is heightened because the European sub-50 PMIs for numerous core EU countries were surging on Thursday. If US PMI readings go below 50 this afternoon, it would indicate that Europe is in better shape for recovery than the US, implying a significant break for the Greenback.
Daily summary: Following the opening bell is the PMI.
The S&P Purchase Managers Index statistics for November will be revealed around 14:45 GMT:
Manufacturing is predicted to fall from 50 to 49.8 percent.
The number of services is predicted to fall from 50.6 to 50.4.
The Index Composite Was at 50.7, with no expectations.
The United Nations’ COP28 gathering, which begins on Thursday in Dubai, is expected to be a headline danger next week. At the same time, OPEC+ will have its postponed meeting to discuss output cutbacks to maintain current oil prices.
Equities are fairly split on the final trading day of the week: This Friday, Japanese indices closed up 0.50%. China, on the other hand, is down, with the Hang Seng losing over 2%. Halfway through the European session, European shares are still looking for direction, while US equity futures are flat.
According to the CME Group’s FedWatch Tool, markets are pricing in a 99.5% possibility that the Federal Reserve will hold interest rates steady during its meeting in December.
The benchmark 10-year US Treasury Note yield has stopped trading at 4.48% and will not change on Thursday because markets are closed.
US Dollar Technical Analysis
From a technical standpoint, the US Dollar is on the verge of flipping a coin to determine what it will do next. Looking at both the daily and weekly charts. The DXY is trading at critical support levels that, if broken. Provide significant room for further decline. This results in a significantly lower US dollar in several currency pairs. All eyes will be on the PMI data this afternoon to see if it will sustain the DXY or continue to fall.
The DXY is hovering at the 200-day SMA near 103.62, and it will need to break through this level. a daily close above it to confirm that the same 200-day SMA is still viable as support. Expect another recovery bounce towards the 100-day SMA near 104.20. With a break and close above. If the DXY can close and open above it later this week. Expect for a return to the 55-day SMA near 105.71, with 105.12 being resistance into next week.
The 200-day SMA will attempt to re-establish itself as a vital supporting level against any decline. If the index breaks through this level again. The psychological level of 100.00 comes into play. With a fairly thin economic calendar and US trading desks closed, there is potential for a significant downturn.
