US Dollar Index stays pressured near one-week low as yields drop amid Fed concerns, US debt ceiling drama. (Pivot Orderbook analysis)
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- US Dollar Index stays pressured near one-week low as yields drop amid Fed concerns, US debt ceiling drama.
- US politicians jostle over debt ceiling plan ahead of June expiration.
- Markets brace for Fed policy pivot, rate cuts in 2023 ahead of next week’s anticipated 0.25% lift.
- Spread between US one-month and three-month Treasury bond Yields widens the most since 2001.
The pair currently trades last at 101.27.
The previous day high was 102.12 while the previous day low was 101.65. The daily 38.2% Fib levels comes at 101.83, expected to provide resistance. Similarly, the daily 61.8% fib level is at 101.94, expected to provide resistance.
US Dollar Index (DXY) remains depressed near 101.30 as it drops for the fourth consecutive day amid early hours of Tuesday’s Asian session. In doing so, the greenback index against the major six currencies tracks the downbeat US Treasury bond yields as traders prepare for dovish Federal Reserve (Fed) and downbeat US data.
Fears of the US reaching its debt limit expiration in June and a political drama ahead of that keep traders on their toes and push them towards the risk-safety, which in turn propelled the demand for one-month US Treasury bond yields. On the same line, are the clues that the US Federal Reserve (Fed) could announce one last rate hike, worth 0.25%, in May before signaling the policy pivot. With this, the difference between one-month and three-month US Treasury bond yields widen the most since 2001.
The same joins Monday’s downbeat performance of April month activity data from the Federal Reserve banks of Chicago and Dallas. That said, the Federal Reserve Bank of Chicago’s National Activity Index (CFNAI) remained unchanged at -0.19 versus -0.02 expected. However, the publication added that the index’s three-month moving average, CFNAI-MA3, increased to +0.01 in March from –0.09 in February. On the other hand, Dallas Fed Manufacturing Business Index for the said month dropped to 23.4 for April versus -14.6 expected and -15.7 prior.
Furthermore, hopes of gradual economic recovery and an upbeat earnings season allow the US Dollar bears to stay hopeful.
Alternatively, geopolitical fears surrounding Russia, due to China’s alleged support to Moscow in fighting with Ukraine, as well as amid the Western readiness to increase sanctions on the Oil-rich nation, prod the market’s cautious optimism and prod the DXY bears.
Against this backdrop, Wall Street closed mixed and the US 10-year Treasury bond yields marked the biggest daily fall in three weeks before closing the day around 3.50%.
Moving on, US Conference Board’s (CB) Consumer Confidence gauge for April, expected to remain steady near 104.1 versus 104.2 prior, will be important for the intraday directions of the DXY. However, major attention will be given to US Q1 GDP, US Core PCE Price Index and the yields for a clear guide.
Also read: US Consumer Confidence Preview: Recession hints likely to keep the USD under pressure
Although a double bottom formation around 100.80-78 puts a floor under the US Dollar Index (DXY) price, the 21-DMA hurdle near $101.95 challenges short-term recovery of the greenback’s gauge versus the six major currencies.
Technical Levels: Supports and Resistances
EURUSD currently trading at 101.27 at the time of writing. Pair opened at 101.72 and is trading with a change of -0.44% % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 101.27 |
| 1 | Today Daily Change | -0.45 |
| 2 | Today Daily Change % | -0.44% |
| 3 | Today daily open | 101.72 |
The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 102.02, 50 SMA 103.31, 100 SMA @ 103.38 and 200 SMA @ 106.27.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 102.02 |
| 1 | Daily SMA50 | 103.31 |
| 2 | Daily SMA100 | 103.38 |
| 3 | Daily SMA200 | 106.27 |
The previous day high was 102.12 while the previous day low was 101.65. The daily 38.2% Fib levels comes at 101.83, expected to provide resistance. Similarly, the daily 61.8% fib level is at 101.94, expected to provide resistance.
Note the levels of interest below:
- Pivot support is noted at 101.54, 101.36, 101.07
- Pivot resistance is noted at 102.01, 102.3, 102.48
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 102.12 |
| Previous Daily Low | 101.65 |
| Previous Weekly High | 102.23 |
| Previous Weekly Low | 101.53 |
| Previous Monthly High | 105.89 |
| Previous Monthly Low | 101.92 |
| Daily Fibonacci 38.2% | 101.83 |
| Daily Fibonacci 61.8% | 101.94 |
| Daily Pivot Point S1 | 101.54 |
| Daily Pivot Point S2 | 101.36 |
| Daily Pivot Point S3 | 101.07 |
| Daily Pivot Point R1 | 102.01 |
| Daily Pivot Point R2 | 102.30 |
| Daily Pivot Point R3 | 102.48 |
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