DXY: US Dollar Retreats After Initial Gains on Mixed Data

USD Index image

The US Dollar Index (DXY) experienced a surge towards 104.70 before leveling off at 104.50. Robust GDP revision figures and positive Initial Jobless Claims data initially fueled a bullish run. However, a softer-than-anticipated Chicago PMI reading curtailed the Dollar’s momentum.

The US economy appears resilient, while the Federal Reserve remains cautious. Despite upward inflation revisions, the Fed, led by Chairman Powell, is refraining from overreacting to temporary price fluctuations. The previously anticipated June interest rate cut cycle remains conditional on further economic data releases.

DXY Technical Analysis: Bulls Maintain Control Despite Stalling

The Relative Strength Index (RSI) shows moderate strength near 60, with the Moving Average Convergence Divergence (MACD) displaying green bars that imply bullish momentum. However, the MACD also hints at a potential slowdown in upward trajectory.

Broadly, the DXY rests comfortably above the 20, 100, and 200-day Simple Moving Averages (SMAs), signifying sustained buyer strength over a wider timeframe. This suggests that despite short-term bearish signals, long-term bullish sentiment prevails. However, the current stall highlights a temporary struggle for dominance in the near-term.


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