The US Dollar (USD) is flat for this week and tilted to move into a negative performance ahead of the US opening bell. The effects from the upbeat US Jobs Report and geopolitical tensions – with ceasefire talks evolving in the Gaza region – are starting to favor the Greenback. Hamas has laid out a plan for a 135-day truce in three stages which is now under discussion by all parties. On the economic front, traders are seeing some confirmation for paring back a bit of US Dollar strength after Minneapolis US Federal Reserve member Neill Kashkari said three rate cuts are appropriate for this year. Three more US Federal Reserve (Fed) members are due to speak later this Wednesday which could move the dial.
These speakers are Adriana Kruger, a member of the Board of Governors, who is speaking near 16:00 GMT, Thomas Barking from the Richmond Fed, near 17:30, and Michelle Bowman, who like Kruger is also a member of the Board of Governors. She is set to speak at 19:00 GMT. The US Dollar Index (DXY) is taking a breather, so it seems, after its rally on Friday and Monday. The Greenback looks to be on its way to being proclaimed King Dollar again, although no real calls are put out there that DXY could pop back to 107. For now the equilibrium looks to be found with the DXY retreating a touch in search of support.
Should the US Dollar Index move higher again, first look for a test at the peak of Monday, near 104.60. That level needs to be broken and is more important than the 100-day Simple Moving Average snap at 104.30. Once broken above that Monday high, the road is open for a jump to 105 with 105.12 as a key level to keep an eye on. The 100-day SMA is clearly the unreliable boyfriend in the rally at the moment. A false break on Monday and no support provided on Tuesday from the moving average opens the door for a bit of a squeeze lower. The first ideal candidate for support is the 200-day SMA near 103.59. Should that give way, look for support from the 55-day SMA near 103 itself.