US Dollar stabilizes after big rally, awaits next market-moving event..
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- US Dollar stabilizes after big rally, awaits next market-moving event..
- US debt-ceiling talks continue into Friday, Biden mentions possible spending freeze and denies default..
- US Dollar Index holds just above 104 and awaits US macroeconomic data for a sense of direction.
The US Dollar (USD) is in wait-and-see mode early on Friday as traders await more economic data out of the US to assess which way to take. The US debt ceiling keeps making headlines, with more details being released about a possible deal, although an agreement this week looks almost close to impossible. US President Joe Biden gave more details about the talks and reiterated that there will be no default on his watch.
On the macroeconomic data front, a big slew of important data is about to hit the markets. At 12:30 GMT, the Fed’s preferred inflation metric is being published – the Personal Consumption Expenditure (PCE) inflation numbers, both core and overall for monthly and yearly performances. These numbers have the potential to shift market expectations for the next Federal Reserve interest rate decision in June, thus being an important market-mover for US Dollar traders.
Personal Spending and Income figures, together with Durable Goods Orders and Inventories data, will be hitting the wires at that same time. To close off the batch of macroeconomic data for the US, the University of Michigan is set to issue its May Final reading for Consumer Sentiment and Inflation Expectations. These numbers could help round-up moves on US Dollar, Treasury yields and other assets.
The US Dollar Index (DXY) has taken out both the 55-day and the 100-day Simple Moving Averages (SMA), respectively, at 102.43 and 102.85 on the upside. The US Dollar safe-haven status keeps seeing bids for the DXY, with 104 having been broken early on Thursday and now eases a touch as a debt-ceiling deal takes some shape.
On the upside, 105.73 (200-day SMA) still acts as long-term price target to hit, as the next upside key level for the US Dollar Index is at 104.00 (psychological, static level), and acts as an intermediary element to cross the open space.
On the downside, 102.85 (100-day SMA) aligns as the first support level to confirm a change of trend. In the case that breaks down, watch how the DXY reacts at the 55-day SMA at 102.48 in order to assess any further downturn or upturn.
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