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James Hyerczyk
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US Dollar Index

The U.S. Dollar is under pressure on Friday after a report that U.S. retail sales unexpectedly stalled in April and as fears of accelerating inflation receded.

The Commerce Department said on Friday that retail sales were unchanged in April after recording a 10.7% surge in March, boosted by stimulus checks. But another acceleration in retail sales is likely in the coming months as the U.S. economy reopens and Americans spend the savings they have been amassing.

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At 16:00 GMT, June U.S. Dollar Index futures are trading 90.350, down 0.385 or -0.42%.

Friday’s drop erases some of a two-day rally in the dollar after data on Wednesday showed U.S. consumer prices increased by the most in nearly 12 years. While the Fed has pledged to keep interest rates low even as inflation rises, some in the market have bet that the Fed will be forced to act sooner than expected.

Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 89.955 will signal a resumption of the downtrend. The main trend will change to up on a trade through 91.435.

The minor trend is also down. A trade through 90.910 will change the minor trend to up.

The new minor range is 89.955 to 90.910. The market is currently straddling its retracement zone at 40.435.

The short-term range is 91.435 to 89.955. Its retracement zone at 90.695 to 90.870 is resistance. This zone stopped the rally at 90.910 on Thursday.

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Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index into the close on Friday is likely to be determined by trader reaction to 90.435.

Bearish Scenario

A sustained move under 90.435 will indicate the presence of sellers. If this move produces enough downside momentum then look for the selling to possibly accelerate into 89.955.

Bullish Scenario

A sustained move over 90.433 will signal the presence of buyers. If this creates enough upside momentum then look for a late session surge into the retracement zone at 90.695 to 90.870, followed by the minor top at 90.910.

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