The US Dollar Index (DXY) is slowly declining as US markets prepare for the release of economic data this week. On Tuesday, the US reported strong Confidence and Housing sector data, but the USD remains soft ahead of high-tier data to be released during the week.
Despite some mild losses and the markets continuing to give up hopes for an interest rate cut in June or July, the resilient US economy allows the Fed to maintain its cautious stance, which cushions the US Dollar. Thursday’s Gross Domestic Product (GDP) and Personal Consumption Expenditures (PCE) will set the pace for bets on upcoming Federal Reserve (Fed) decisions. The current odds predict a first cut in September.
DXY technical analysis: Greenback witnesses sustained selling pressure and bear command
The daily chart indicators continue to show mounting steady bearish momentum in the DXY. The Relative Strength Index (RSI) maintains a negative slope and remains in a selling zone, indicating prevailing selling pressure. This is even more evident with the red bars of the Moving Average Convergence Divergence (MACD) indicator that showcase bearish momentum.
In terms of Simple Moving Averages (SMAs), despite the DXY operating below the 20-day SMA and displaying bears’ short-term efficiency, it continues to remain above the 100 and 200-day SMAs, suggesting bulls have relative strength over a more extended timeline.
