DXY: Bullish movement in the USD Index stalls around 110.60

VOT Research Report

Analytics and Recommendations

• Around 110.60, the dollar’s daily recovery stalls.
• In October, the NIFB Business Optimism Index dipped to 91.3.
• The Tuesday midterm elections continue to be a focus for investors.

After hitting daily highs at 110.60 when measured by the USD Index (DXY) on Tuesday, the dollar’s recovery seems to be losing some steam.

Examining the midterm elections is USD Index

On Tuesday, the index held onto its daily gains above the 110.00 level in an attempt to put an end to two days of daily retracements and begin a more significant recovery.

Since the US midterm elections are currently taking place, market investors are becoming cautious. The dollar reduces some of its advance coupled with a muted correction in US yields throughout the curve.

The NIFB Business Optimism Index in the US data area fell slightly to 91.3 in October (from 92.1), and the IBD/TIPP Economic Optimism index is scheduled to be released later, before the API’s weekly report on US crude oil inventories for the week ending November 4.

What to watch out for about USD

After falling to 2-week lows at the 110.00 area on Tuesday, the index tries to make a modest rebound.

The Federal Reserve’s increased resolve to raise rates until inflation appears to be under control, despite the likelihood of an economic downturn and some momentum loss in the labor market, is supporting the dollar’s underlying strength in the meanwhile.

When considering a more general situation, the US dollar also seems to be supported by the Fed’s dispersion from most of its G10 counterparts, as well as occasional resurgences of risk aversion and geopolitical exuberance.

this week’s significant US events: Consumer Credit Change (Monday), Midterm Elections (Tuesday), MBA Mortgage Applications, Wholesale Inventories, Inflation Rate, First Jobless Claims, Monthly Budget Statement, and Preliminary Michigan Consumer Sentiment (Wednesday) are all upcoming events (Friday).

On the back burner are the US midterm elections. Tough or soft? the recovery of the US economy. Future rate increases by the Federal Reserve versus predictions of a recession in the coming months. Fed’s reversal. geopolitical effervescence in opposition to China and Russia. US-China trade tensions are ongoing.

Relevant USD Index tiers

The index is currently up 0.07% at 110.29 and will encounter resistance at 113.14 (the month’s high from November 3), 113.88 (the month’s high from October 13), and finally 114.76. (2022 high September 28). The collapse of 109.53 (the monthly bottom set on October 27) could lead to 109.35 (the weekly bottom set on September 20), then 107.68. (monthly low September 13).

Candlestick Pattern

Indication Bearish reversal

Reliability High

Description This pattern is a more reliable addition to the standard Engulfing pattern.
A bearish Engulfing pattern occurs in the first two candles.
The third candle is a black one with a lower close than the second candle.
The third candlestick is confirmation of the bearish trend reversal.

Pivot Points

Technical Indicators

Moving Averages