Analysis: The Dollar Index (DXY)

• Not much has changed for the dollar index and it continues to hover steadily around 101.15, which is its lowest level in 5-months.

• The index fell substantially this week from 101.80, however, it found a strong support near 100.60.

Yesterday’s Economic Events

• On Thursday, Initial Jobless Claims in the United States rose to 218K from 206K in the previous week, higher than the expected 210K.

• The change in Pending home sales data also came lower than expected. Apart from that the Treasury yield on 7-year Notes have been declined further to 7.859% from 4.399%.

Impact: 

• All the three mentioned factors were in line with Fed’s objective to lower the inflation. 

• Rising jobless claims means people are losing their jobs and lower home sales means people do not have disposable income in their hands. 

• However, falling Treasury yields must weaken dollar, which we might witness in today’s trading session.

Current Situation: On Friday, the US dollar travelling with utmost steadiness near the resistance of fib level 0.786 at 101.15.

Technical Analysis

• The index is moving below the middle band of the Bollinger band. Prices are also trending below the 0.0 line of CCI indicator in the selling zone

• Both indicators are indicating bearishness.

Important Levels to Watch:

• Support: 101.25

• Resistance: 100.62

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