US Dollar Analysis May 3

US Dollar Analysis May 3

Will raising the rate of return on Treasury bonds support the dollar?

Late last week, we saw an upward return of the US dollar index. Most likely, this upward return was due to the settlement of accounts at the end of the month. This means that sellers have stabilized part of their profits by closing the sale deal, and some economic actors have been forced to buy dollars to settle their accounts. The US dollar index performed poorly in April. However, US economic data have been good, with Treasury yields and inflation expectations rising.

Currently, the growth of Treasury yields does not have a positive effect on the value of the US dollar. The US Federal Reserve set a meeting last week. The dollar did not react seriously to the meeting. In fact, the impact of the US Federal Reserve's interest rate meeting was overshadowed by prices. The Federal Reserve has explicitly stated that as long as the US economy is at risk of coronation, interest rates will remain low and expansionary and monetary protection policies will continue. From the market point of view, the probability of raising interest rates by January 2022 is less than 10%.

The recent rise in US Treasury yields has been largely due to the tone of the US Federal Reserve. The head of the US Federal Reserve previously believed that inflation was temporary, but in a recent speech said that much of the growth was temporary. So far, bond yields have not been supported by the dollar. Meanwhile, prices continue to rise in the commodity market and somehow support market inflation expectations. If inflationary expectations continue to rise and exceed the rate of return on Treasury bonds, the real rate of return on the United States can be seen to decline again. This will not be good news for the dollar.

Important US economic data will be released this week in the Forex economic calendar. The ISM Manufacturing and Services Indicators, the Federal Reserve Speaker's Speech, the Factory Order Index, the ADP Employment Change Index, the US Unemployment Claims Index, the NFP Index, and the Wage Growth Rate will have a strong impact on dollar fluctuations.

Fundamental analysis of the US dollar Sunday, April 18

Fundamental analysis of the US dollar Sunday, April 18

US 10-year Treasury bond yields have fallen to 1.53 percent

The US dollar index is still below the 200-day moving average at 92.21. US 10-year Treasury yields failed to rise, falling to 1.53 percent (new monthly floor). Optimism about the future of the global economy, or risky currents, has also reduced demand for safe-haven assets such as the US dollar.

The US dollar index has been declining since the beginning of April. The dollar has fallen, despite a 9.8 percent rise in the US retail index. This means that economic data may no longer be relevant to the US dollar. Because the US Federal Reserve has decided not to change its monetary policy for the next few years. Recently, the Vice President of the US Federal Reserve stressed that even a sharp fall in the unemployment rate is not an excuse to raise interest rates. This means that we should expect a further reduction in the rate of return on Treasury bonds and a weakening of the US dollar.

US Dollar Index (DXY) Analysis Thursday, April 15

US Dollar Index (DXY) Analysis Thursday, April 15

The downward trend of the US dollar index has intensified with the breaking of the 200-day moving average indicator.
If the price penetrates below the level of the 50-day moving average indicator at 91.60 points, we will see the continuation of the downtrend. Next, the price target in mid-March, which is 91.30 points, will be the next target for sellers.
In general, as long as the index is below the indicator of the 200-day moving average at 92.23, the overall trend is downtrend.

Technical levels
Last level of the day: 91.56
Daily fluctuations: 17 pips
Daytime fluctuations (٪): -0.10
Start: 91.65

Trends
20-day moving average: 92.43
50-day moving average: 91.57
100-day moving average: 91.03
200-day moving average: 92.26

Levels
Yesterday's highest level: 91.85
Yesterday's lowest level: 91.58

Last week's highest level: 93.11
Last week's lowest level: 92

Last month's highest level: 93.44
Last month's lowest level: 90.63

Fibonacci 38.2. Daily: 91.68
Fibonacci 61.8. Daily: 91.74

Pivot S1 Daily: 91.53
Pivot S2 Daily: 91.42
Pivot S3 Daily: 91.26
Pivot R1 Daily: 91.81
Pivot R2 Daily: 91.97
Pivot R3 Daily: 92.08

📈 US Dollar Index (DXY) Analysis Tuesday, April 6

US Dollar Index (DXY) Analysis Tuesday, April 6

The downward trend of the US dollar index has stopped yesterday after the index hit the level of the 200-day moving average indicator at 92.40 points.
As long as the index above the level of the 200 moving average indicator fluctuates, the general trend is upward and the index is likely to grow.
On the other hand, if the index penetrates below the level of the 200-day moving average indicator, the probability of the index falling to 91.30 increases.

Technical levels

Last level of the day: 92.74
Daily fluctuations: 25 pips
Fluctuations of the day (۰): 0.16
Start: 92.59

Trends

20-day moving average: 92.29
50-day moving average: 91.38
100-day moving average: 91.05
200-day moving average: 92.44

Levels

Yesterday's highest level: 93.11
Yesterday's lowest level: 92.54
Last week's highest level: 93.44
Last week's lowest level: 92.72
Last month's highest level: 93.44
Last month's lowest level: 90.63
Fibonacci 38.2. Daily: 92.76
Fibonacci 61.8. Daily: 92.89
Pivot S1 Daily: 92.39
Pivot S2 Daily: 92.18
Pivot S3 Daily: 91.82
Pivot R1 Daily: 92.95
Pivot R2 Daily: 93.32
Pivot R3 Daily: 93.52

US Dollar Index (DXY) Analysis Thursday, April 1

US Dollar Index (DXY) Analysis Thursday, April 1

The US dollar index is experiencing a corrective trend after reaching its highest annual level in the range of 93.4 to 93.5 units.
Although in the short term the trend is still bullish, but as we approach the buy saturation zone, there is a possibility that the index will fall to the level of the 200-day moving average indicator in the range of 92 units.
If the index can maintain its position above the level of the 200-day moving average indicator, then we can expect the index to grow in the short term.

Technical levels
Last level of the day: 93.13
Daily fluctuations: 34 pips
Daytime fluctuations (٪): 0.17-
Start: 93.29
Trends
20-day moving average: 92.06
50-day moving average: 91.17
100-day moving average: 91.05
200-day moving average: 92.53
Levels
Yesterday's highest level: 93.35
Yesterday's lowest level: 92.88
Last week's highest level: 92.92
Last week's lowest level: 91.71
Last month's highest level: 91.6
Last month's lowest level: 89.68
Fibonacci 38.2. Daily: 93.17
Fibonacci 61.8. Daily: 93.06
Pivot S1 Daily: 93
Pivot S2 Daily: 92.7
Pivot S3 Daily: 92.52
Pivot R1 Daily: 93.47
Pivot R2 Daily: 93.65
Pivot R3 Daily: 93.94

Fundamental analysis of the US dollar

Fundamental analysis of the US dollar

Why does the US dollar index not fall?
While we have seen a steady decline in the US dollar index over the past ten months, last week's fluctuations have shown how the US dollar will strengthen. Investors are flocking to US Treasury securities as volatility intensifies and risk aversion flows across markets. Last week, the VIX index recorded its highest overnight jump in three years. The index reflects the fear of US stock market investors.
Risk aversion supported Treasury bills and the US dollar. Also, from the beginning of 2021, we are witnessing the formation of a price floor in the US dollar index. The US dollar index is looking for a price floor as the Dow Jones, S&P 500 and NASDAQ stock indices have risen during this period. The reason for the US dollar index floor is changes in the rate of return on treasury bonds. The market has long focused on changes in Treasury bond yields. Biden's new financial package has boosted Treasury yields. Rising Treasury yields and the Federal Reserve's gradual exit from expansionary monetary policy could benefit the US dollar. That is why the US dollar index has been able to maintain its position for now.
It is unclear whether Biden's $ 1.9 trillion financial package will be approved by mid-March. The size of this package may also change. This means that investors may be disappointed in the medium term. Meanwhile, the entry of micro-investors into the shares of companies that have recently been sold by mutual funds (Short Sell or borrowing sales) has caused a heavy loss to investment funds, which may cause them to go bankrupt. Bankruptcy of large investment funds could turn into a new financial crisis in the United States. This week, US dollar traders need to look at US economic indicators in addition to GME and AMC stock fluctuations.