On Wednesday, the US Dollar Index (DXY) saw a modest recovery as US Treasury yields remained above 3.80%. This uptick in yields provided support for the Greenback after a lower close on Tuesday.
Despite the lack of significant economic data releases, the US Dollar is expected to trade within a narrow range in the absence of major catalysts.
Key Market Insights: DXY Rebounds on Quiet Market Day
- US Dollar gains strength as Treasury yields hold above 3.80% on a quiet trading day
- Market expectations suggest a potential 100 basis points easing by year-end, with a 25-35% chance of a 50 bps cut in September
- The upcoming release of August Nonfarm Payrolls report could influence Fed’s policy decision, with strong data potentially leading to a 25 bps cut
- Technical indicators show the DXY index finding support around 101.00 levels, with resistance levels at 101.50 and 101.80
Technical Analysis: DXY Index Shows Signs of Reversal
The DXY index is currently testing key support levels near its December lows, with indicators like RSI and MACD suggesting a potential turnaround in bearish momentum. Support levels are identified at 100.50, 100.30, and 100.00, while resistance levels lie at 101.00, 101.50, and 101.80.
As markets await crucial labor market data, the Fed’s policy decisions are likely to be guided by economic indicators such as the Nonfarm Payrolls report. Stay informed to make informed investment decisions in the current market environment.