U.S Dollar Bulls Having a Rough Q2, Despite Present Inflationary Pressures

The dollar bulls are presently having a rough Q2 as the safe-haven currency suffer pullbacks amid high hopes that the global economy was set for a strong recovery, thereby triggering global investors to increase their buying pressure on riskier assets, particularly global equities via reducing their dollar holdings.

Dollar bulls were earlier seeking a lifeline on the bias that some leading market experts saw higher U.S. interest rates coming sooner than the U.S. Federal Reserve timeline amid rising inflation.

Candlestick patterns reveal dollar bulls have failed several times in the past few days to break above 90.172 a notable level of resistance, hinting the greenback faces more headwinds with gold breaking above $1,900 an ounce, the tides against the dollar further seems to be strengthening, at a moment that appeared to look the greenback might likely rally, on resurging COVID-19 attacks at key emerging markets.

In the short-term, currency traders will fix their gaze on April low, pegged at 90.42, as such resistance level needs to be smashed with market forces pricing in a slightly more hawkish Federal Reserve Bank going forward.

However, recent data reveal currency traders are reining in their bearish bets on the world’s safe-haven currency following a stronger April U.S. inflation data, meaning it could be costly ruling out DXY bulls resolve in breaking above the 90 index points in the mid-term.

The inability to overcome such a price level might further signal the presence of sellers, as the first downside target will be a minor pivot fixed at 89.618.