Bears keep control over the dollar
2023.01.28 03:57
Bears keep control over the dollar
Budrigannews.com – Despite Friday’s gains, the U.S. dollar, as measured by, ended the week virtually unchanged.
Following the release of (PCE) price index data, the DXY index retreated from a daily high of 102.19 and is currently trading at 101.98, 0.16 percent above its opening price.
According to the U.S. Bureau of Economic Analysis, the Personal Consumption Expenditures Price Index’s annual rate of inflation decreased to 5% in December from 5.5% in November. In addition, in line with market expectations, the, the Fed’s preferred inflation gauge, decreased to 4.4% from 4.7% the month before. The Core PCE and PCE price indexes both experienced monthly increases of 0.3 percent and 0.1 percent, respectively.
While the index came in at 64.9, which was higher than anticipated, other data suggested that the fell to 2.9%.
Markets expect the Federal Reserve to be less aggressive as inflation has been falling steadily, with two more 25-basis point interest rate hikes anticipated before the current tightening cycle ends. The short-term market price dynamics will be influenced by Jerome Powell’s forward guidance and investor estimates of when the Fed will switch to rate cuts.
The Fed’s decision will be announced on Wednesday, and the nonfarm payrolls report from the United States will be released on Friday. Additionally, the decisions of the Bank of England and the European Central Bank will be made public.
According to the weekly and daily charts, the DXY index still has a bearish bias from a technical standpoint. Investors’ indecisiveness ahead of important macroeconomic events is reflected by the price printing a Doji candle and weekly indicators remaining deep in negative territory.
On the plus side, the 20-day moving average (SMA) at 102.80, the area at the psychological mark of 103.00, and the subsequent resistance levels align at 102.20. On the other hand, the cycle low of 101.56, followed by the 101.00 and 100.50 areas, serve as the immediate support level.
