- DXY comes under further pressure at the end of the week.
- The index breaks below the 200-day SMA in the 98.50 area.
- PCE results, flash Trade Balance figures next of relevance.
The greenback faces extra selling pressure at the end of the week and is forcing the US Dollar Index (DXY) to recede to fresh 2-month lows in the 98.20/15 band.
US Dollar Index weaker on risk appetite, flows
The index is down for the fourth consecutive session on Friday, extending further the weekly leg lower after Monday’s rejection of tops in the vicinity of the psychological 100.00 barrier.
Month-end flows and the improved sentiment in the risk-associated complex appear behind the move lower in the buck, all along the cautious stance from investors amidst the recent pick up in the US-China-Hong Kong effervescence.
Later in the NA session, all the attention is expected to be on President Trump’s press conference, with China on top of the agenda. Data wise, inflation figures tracked by the PCE area due, seconded by advanced Trade Balance results, the Chicago PMI, Personal Income/Spending and the final Consumer Sentiment gauge for the current month.
What to look for around USD
The greenback remains under heavy pressure towards the end of the month, putting the critical 200-day SMA to the test in the mid-98.00s. In the meantime, the dollar remains vigilant on the US-China trade front, the gradual return to some sort of normality in the US economy and the broader risk appetite trends as main drivers of the price action. On the constructive stance around the buck, it remains the safe haven of choice among investors, helped by its status of global reserve currency and store of value. The dollar also derived extra support after Fed’s J.Powell recently ruled out negative rates, although he stressed the readiness of the Fed to implement further measures to support the economy.
US Dollar Index relevant levels
At the moment, the index is retreating 0.21% at 98.26 and faces the next support at 98.18 (monthly low May 29) followed by 97.87 (61.8% Fibo of the 2017-2018 drop) and then 97.35 (low Jan.31). On the upside, a break above 99.03 (100-day SMA) would aim for 99.98 (high May 25) and finally 100.56 (monthly high May 14).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD stays heavy under 0.6150 after China's inflation data
AUD/USD is deep in the red below 0.6150 in Thursday's Asian trading, reversing the previous recovery led by US President Trump's decision for an immediate 90-day tariff pause for many countries. However, escalaitng US-China trade war and Chinese disinflation remain a drag on the Aussie pair.
USD/JPY tumbles below 147.00, awaits US CPI for fresh impetus
USD/JPY has come under intense selling presure and drops below 147.00 in the Asian session on Thursday. The US-China trade war escalation and the divergent BoJ-Fed policy expectations underpin the Japanese Yen and weigh heavily on the pair amid a renewed US Dollar downtick. US CPI awaited.
Gold sticks to gains near $3,1000 amid escalating US-China trade tensions
Gold price extends the previous rebound to trade near $3,100 in the Asian session on Thursday. The safe-haven demand amid escalating trade tensions between the United States and China provides some support to the precious metal but the further upside appears elusive ahead of US CPI data.
Senate approves Paul Atkins as new SEC Chair
The Senate voted 52-44 on Wednesday to approve Paul Atkins as the new SEC Chair. The news could improve sentiment in the crypto market, considering Atkins has previously advocated for better crypto regulations and served as an advisor to crypto companies.
Tariff rollercoaster continues as China slapped with 104% levies
The reaction in currencies has not been as predictable. The clear winners so far remain the safe-haven Japanese yen and Swiss franc, no surprises there, while the euro has also emerged as a quasi-safe-haven given its high liquid status.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.