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June US Dollar Index Easing after Hitting 20-year High

By:
James Hyerczyk
Updated: May 8, 2022, 04:32 UTC

The direction of the June U.S. Dollar Index into the close on Friday is likely to be determined by trader to 103.800.

US Dollar Index

In this article:

The U.S. Dollar is inching lower late in the day on Friday after touching a 20-year high against a basket of major currencies earlier in the session. The catalysts behind the price action are worries over a global recession and expectations the Federal Reserve will tighten monetary policy faster than peers to stem runaway inflation.

At 20:00 GMT, June U.S. Dollar Index futures are trading 103.690, down 0.112 or -0.11%. The Invesco DB US Dollar Index Bullish Fund ETF (UUP) finished the day at $27.71, up $0.05 or +0.18%.

Late in the session against the Euro, the U.S. Dollar is down 0.07%. The British Pound is inching lower after dropping below $1.2300 for the first time in nearly two years, a day after the Bank of England sent a start warning that Britain risks a double-whammy of a recession and inflation above 10%. The BoE also joined the Fed in raising rates, hiking them by a quarter of a percentage point to 1%.

Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at 104.105 will signal a resumption of the uptrend. A move through 102.375 will change the main trend to down.

The minor range is 102.375 to 104.105. Its 50% level at 103.240 is support.

The short-term range is 99.810 to 104.105. If the main trend changes to down then look for the selling to possibly extend into its 50% level at 101.958.

Short-Term Outlook

The direction of the June U.S. Dollar Index into the close on Friday is likely to be determined by trader to 103.800.

A sustained move over 103.800 will indicate the presence of buyers. Taking out 104.105 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with no objective at this time.

A sustained move under 103.800 will be a sign of weakness into the close. The first downside target is the pivot at 103.240. This is a potential trigger point for an acceleration into the main bottom at 102.375.

Side Notes

A close under 103.800 on Friday will form a potentially bearish closing price reversal top. If confirmed on Monday, this could trigger the start of a 2 to 3 day correction.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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