US Dollar Weekly prediction: Bearish betting rise on fed’s stance. The Fed maintained rates of interest steady but stated two more rate hikes

US dollar Index (DXY) fell below the support zone

The US dollar index’ decline beneath crucial support. Indicating that the market appears to have become over conflict against the aggressive stance of the US Fed

During its meeting last week, the central bank held interest rates unchanged yet unintentionally provided a bullish surprise. By forecasting 2 extra rate rises in 2023 due to the dismally sluggish decrease in inflation. The economy’s resistance to increased liquidity, the increase of the nation’s debt limit, plus lowered risks of stress in the banking sector. May also have influenced the aggressive outlook.

The idea the Fed’s inflation predictions have not kept pace with actual inflation. As well as producer rising costs and import rates now indicate a slowdown in activities appears to be the foundation of the market’s dovish valuation. The Fed increased its forecast for 2023 growth in GDP and anticipates a slower pace of inflation decline. Through the end of 2023. The main PCE is predicted to decline from its present value of 4.7% to 3.9%, down versus the 3.6 percent year-over-year observed in March.

US dollar – Technical Perspective

Technical graphs show that a month-long rising impetus has subsided as the DXY index’s decline beneath crucial support reached an early June bottom of 103.40. It appears to be slowly moving in the direction of its April bottom of 100.80 area.

The graphs suggest that the US greenback has been in a downturn since the beginning of 2023. The pattern of smaller-tops & weaker-lows beginning in late 2022 serves as more support. The 200-week MA, which is currently at 98.20, marks the next support level under 100.80. The route of least resistance of the dollar stays lateral downward. Unless the index manages to overcome a difficult obstacle near the March peak of 105.90 zone.

US dollar – Technical Indicators – (Weekly)