US Dollar Index Price Vulnerable Near 96.00 amid Soft Yields, Awaits CPI
- DXY is struggling to increase its profits in two weeks.
- Yields, stock futures are down amid Fed rate hike, China talk
- Initial claims for unemployment in the US fell to their lowest level since 1969, while inflation expectations eased.
- Geopolitics are also taken into account by the US consumer price index, Omicron.
On Friday morning, the US dollar index (DXY) price hit an intraday low of 96.20, extending gains from earlier in the week. In spite of this, the dollar indicator marks gloomy moves every day, dropping 0.02% as market participants keep a close eye on US inflation data.
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As risk distortion supported demand for the US dollar as a safe haven, the US dollar rose the most since November 24 the previous day. When the dollar reversed, geopolitical news and Fed headlines weighed on sentiment too much, but Omicron and more reliable US data supported risk-taking more.
Despite this, both Wall Street indicators and US Treasury bond yields suffered losses the day before, reflecting risk aversion, and both risk bardenine strands of both risk bardenine tribes have corrected.
The initial jobless claims in the US fields rose to their lowest level since 1969 with 184,000 claims. The possibility of a faster shrinkage of the US Federal Reserve System (FRS) increased with the expected 215,000 and projected 227,000. Leading banks such as Goldman Sachs, JP Morgan, and Morgan Stanley are among the hawks expecting further rate hikes in 2022 and 2023.
In recent months, the DXY has been impacted by a decline in US inflation expectations, as measured by the St. Louis Federal Reserve (FRED). The expectations for inflation have fallen to 2.47% on Thursday, following a four-day rebound from their October lows, indicating a negative surprise for the Fed hawks.
As a side note, the chatter about China’s Evergrande and Kaisa’ looming defaults is joining Sino-US tensions to accelerate risk and help DIA, wide bleiger in a similar vein to US support for Ukraine in its fight against Russia and the negotiations between Washington and Israel over the transfer of diplomatic relations with Tehran.
The market, on the other hand, is concerned about the expected sides and fears them.
Predicting short-term DXY movements will depend on the US Consumer Price Index (CPI) and the preliminary Michigan Consumer Sentiment Index.
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US dollar index price technical analysis: Probability of a bearish breakout
The US dollar index consolidates just above the 20-period SMA on the 4-hour chart. Although the price remains supported, there is the probability of a deeper retracement towards 50-period SMA around 94.90 ahead of a horizontal level near 94.50. However, the immediate strong strong support around 95.65 may keep the price well bid around 96.00. On the upside, 96.50 is the immediate resistance ahead of 97.00.
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