US Dollar (USD) is set to end the week in the green.
The US Dollar (USD) is set to end the week in the green after demonstrating its durability earlier this week. Albeit without any safe haven inflows as stock markets continue to fall.
A few market actors are attempting to dethrone the US Dollar. The BRICS (Brazil-Russia-India-China-South Africa) countries are organizing a convention to reduce. Their reliance on the US Dollar for exchanging commodities. But the Chinese People’s Bank has set the toughest fixing for the Yuan versus the US Dollar in its history. The PBoC strives to keep the Yuan stable in order to keep speculators away from the Chinese currency.
On the data front, it was a fairly quiet Friday, with no major market moving events. This will provide market participants with the opportunity to begin planning for the tumultuous week ahead. With a lot of data from Europe and the annual Jackson Hole Symposium as icing on the cake. Every year, the world’s smartest minds and souls from the world’s largest central banks convene in Wyoming to debate monetary policy. This event will generate a lot of attention because it is frequently the best time for the US Federal Reserve (Fed) to raise interest rates. to either announce a change in monetary policy or make a longer-term commitment on policy adjustments.
Technical examination
In the US Dollar Index (DXY), the US Dollar is hanging near a monthly high. The US dollar falls somewhat this Friday, but it remains at various three- to six-month highs against most key G10 peers. Any quick headline or pressure could result in new highs if the headlines have an odd tone.
On the plus side, 104.00 is the level to aim for. The July high of 103.57 is critical and must be broken on a daily basis in order for the DXY to post significant monthly gains. If this US Dollar surge continues into the end of the year, May’s peak at 104.70 could become a reality once more.
On the downside, many floors are expected to prevent the DXY from falling sharply. The first is the 200-day Simple Moving Average (SMA) at 103.26, which was briefly broken on Thursday. When the price falls below 103.00, some room for additional decline opens up. However, the 55-day and 100-day SMAs are both waiting for any dropping knives around 102.34.
