The US Dollar remains stable after the release of employment data and in anticipation of Consumer Price Index (CPI) figures. The DXY Index’s future is uncertain!
Despite the addition of 253k jobs in April, which exceeded the forecasted 160k and the revised 165k prior, the US Dollar’s weakness has persisted into the current week, as it had already declined at the end of last week. The unemployment rate also registered at a low 3.4% in April, which is the lowest it has been since 1969.
Assets with high beta risk, such as the Australian Dollar, have experienced moderate gains today. Meanwhile, the EUR/USD and GBP/USD currency pairs have maintained their positions near their 2023 highs.
The equity indices in the Asia-Pacific region have shown mostly positive movement subsequent to the substantial gains observed on Wall Street on the previous Friday. However, an exception to this trend was witnessed in Japan, where the market resumed trading after an extended period of holiday and experienced a decline.
As of the time of writing, futures markets indicate a modestly weak beginning to the North American cash session.
The yields of the Treasury remain steady along the curve following a slight increase on Friday. The rise was primarily observed at the shorter end, where the 2-year bond has returned above 3.92%, having previously been at 3.56% last month.
Both crude oil and gold have experienced slight increases, with the WTI futures contract surpassing US$ 71.50 per barrel and the Brent contract hovering around US$ 75.50 per barrel. Furthermore, spot gold has maintained its value above US$ 2,020.
This week, attention in the academic sphere will be directed towards the US Consumer Price Index (CPI) and Producer Price Index (PPI) on Wednesday and Thursday, respectively. This follows a 25 basis point increase by the Federal Reserve last week.
The Australian government is scheduled to present its annual budget on Tuesday evening, where it is anticipated that augmentations in the taxation of liquified natural gas (LNG) exports will be proposed.
Following the release of Germany’s industrial production data today, there will be a subsequent publication of US wholesale inventory figures. The complete economic calendar is accessible for viewing at this time.
DXY (USD) INDEX TECHNICAL ANALYSIS
The DXY index has approached the lower boundary of its range as it was unsuccessful in surpassing a downward trend line towards the upper side during the previous week.
Potential support levels are present within the range of recent lows, which is observed between 100.79 to 101.13. Additionally, the April 2022 low at 99.57 may also serve as a possible support level.
Potential resistance levels on the upper end include the previous peaks of 102.40, 102.81, and 103.06. The 55-day and 100-day simple moving averages (SMA) are presently in close proximity to the latter two highs, indicating that they may provide resistance.
