USD Index wobbles around 106.80, looks at data, Fedspeak

  • November 18, 2022
  • The index trades within a tight range near 106.80.
  • US yields reverse course and now slip back to the red territory.
  • CB Leading Index, housing data next of note in the NA session.

The greenback exchanges gains with losses in the 106.70 region when gauged by the USD Index (DXY) amidst the generalized lack of direction in the global markets on Friday.

USD Index now focuses on data

Despite the current vacillating price action, the index remains en route to close the week with small gains following the sharp retracement seen in the previous one

Most of the change in the direction of the dollar in the last couple of sessions comes in response to hawkish comments from St. Louis Fed J.Bullard on Thursday, which dialed down the potential discussion of a pivot in the Fed’s policy at the December event.

In the US calendar, the CB’s Leading Index comes next seconded by Existing Home Sales and the speech by Boston Fed S.Collins.

What to look for around USD

Price action around the dollar remains mixed and relegates the index to keep navigating the area around 106.50, all amidst a broad-based consolidative theme.

In the meantime, the greenback is expected to remain under the microscope amidst persistent investors’ repricing of a probable slower pace of the Fed’s rate path in the upcoming months.

Key events in the US this week: CB Leading Index, Existing Home Sales (Friday).

Eminent issues on the back boiler: US midterm elections. Hard/soft/softish? landing of the US economy. Prospects for further rate hikes by the Federal Reserve vs. speculation of a recession in the next months. Fed’s pivot. Geopolitical effervescence vs. Russia and China. US-China persistent trade conflict.

USD Index relevant levels

Now, the index is gaining 0.11% at 106.81 and is expected to meet the next up barrier at 109.15 (100-day SMA) seconded by 110.76 (55-day SMA) and then 113.14 (monthly high November 3). On the other direction, the breakdown of 105.34 (monthly low November 15) would open the door to 105.05 (200-day SMA) and finally 104.63 (monthly low August 10).