US dollar and Investors are waiting for Federal Reserve Address and stance in the upcoming week. Interest Rates Policy is in the Focus
US dollar Key Analytical Points
The US economy’s tolerance for additional interest rate increases may be expanded.
The Fed is anticipated to maintain current interest rates.
The immediate future dollar weakening is predicted by negative dispersion.
US dollar hinges on Fed Stance – Hold – for How Long ?
The US dollar has had a wild week, starting with conflicting US CPI statistics. Following PPI & retail sales, which supported the healthy strength of the nation’s economy. While hinting at possible rising prices to come. Though overall ‘elevated for extended’ theme continues and may become more enduring. The consensus prediction for the following week’s Fed rate decision suggests a rate hold.
Monetary valuation indicates the prospect of another rate rise if necessary (as stated by Fed members). Yet a protracted high interest rate situation might keep the US dollar strong. Surprisingly amid a decline in the most current Michigan consumer confidence index. The reductions in rates for December of 2024 were reduced down by around 7bps – up -81. Given reaction to current US data on the economy.
The news expected coming up will focus on exactly what follows next in terms of trekking in the month of Nov or Dec in the current year. We anticipate further of the identical thing from Fed Chairman Jerome Powell, with the rhetoric stressing the significance of statistical reliance. Whilst leaving the option left to more rate rises if necessary. Building permit figures will be released ahead of the Fed’s statement. Although it is not likely to have any significant influence on how decisions will be made.
Technical Perspective
The value activity on the daily DXY graph may reveal two stories. The first is bearish &negative contrast. Whereby prices make new highs whereas the (RSI) makes lower peak values, frequently giving rise to further negative aspects.
Based on an optimistic standpoint, the possibility of a golden cross configuration exists. However, it has not yet fully formed, if the 50-day MA crosses over the 200-day MA. The possibility of a further move upward is lower than the odds of a return to successive support areas.
Key Levels to Watch
Resistance levels:
- 106.00
Support levels:
- 105.00
- 104.45
