With a 0.30% decrease, the DXY Index dipped to 103.45, reflecting a weekly loss of the same magnitude. The latest report on S&P PMIs indicates a nuanced economic landscape, marked by a weakened manufacturing sector and an expanding service sector.
On Friday, the US Dollar (USD) is experiencing a retreat, as evidenced by the decline of the DXY index to 103.45. This metric gauges the USD against a basket of global currencies and is influenced by a combination of mixed S&P PMIs and dovish sentiments surrounding the Federal Reserve (Fed).
Concurrently, the broader economic indicators in the United States depict a cooling trend in inflation and job creation, amplifying concerns about an economy displaying signs of weakness, as reflected in the soft S&P PMIs. This prevailing economic narrative has instilled a belief among traders that the Federal Reserve (Fed) will likely adopt a more cautious and less aggressive stance, thereby contributing to the depreciation of the US Dollar.
Technical Outlook on the US Dollar Index
While the daily Relative Strength Index (RSI) approaches the threshold of oversold conditions, hinting at a market that may be overly saturated with bearish sentiment, it also signals the possibility of an impending reversal to the upside. This dynamic is underscored by the indication that selling pressure is showing signs of diminishing strength. The price level of $103.434 has emerged as the recently established support level. Anticipations surround the dollar’s recovery from this pivotal point, with an expected bounce-back in price toward the $106 level.
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