The DXY finds itself at a juncture, rallying amidst mixed economic cues and rising global tensions. Today's retail sales figures, dipping into the red, contrast with the index's upward trajectory, suggesting an intriguing divergence from the expected market reaction to domestic economic indicators.
Technical analysis: The DXY closed above the 106.00 mark, establishing new ground. This comes after a bullish leap, breaching past the previous consolidation area marked by the red line. The price action is somewhat at odds with the weaker retail data, hinting that the market may be weighing other factors more heavily, such as the ongoing conflict affecting sentiment. While the index has found support at 105.900, the upper bound of 106.200 could present a formidable resistance. Breaking through could usher in a continuation of the rally, whereas a retreat from this level might signal a retest of the support zone.
Our position: In the face of the current market volatility, spurred by international conflict and unexpected economic data, our stance is one of prudence. We’re looking at these levels: a hold above 106.200 could prompt a bullish strategy, targeting higher resistance points. On the flip side, a bearish reversal, influenced by the broader economic picture or escalating geopolitical tensions, could see us exploring shorts, particularly if the DXY retreats from its recent peak.
Trade considerations: As the market digests the impacts of the retail sales report and ongoing international conflicts, we’re keeping a keen eye on the DXY’s response to these resistance levels and expecting the dollar to push further as inflation came in hotter than expected.
Technical analysis: The DXY closed above the 106.00 mark, establishing new ground. This comes after a bullish leap, breaching past the previous consolidation area marked by the red line. The price action is somewhat at odds with the weaker retail data, hinting that the market may be weighing other factors more heavily, such as the ongoing conflict affecting sentiment. While the index has found support at 105.900, the upper bound of 106.200 could present a formidable resistance. Breaking through could usher in a continuation of the rally, whereas a retreat from this level might signal a retest of the support zone.
Our position: In the face of the current market volatility, spurred by international conflict and unexpected economic data, our stance is one of prudence. We’re looking at these levels: a hold above 106.200 could prompt a bullish strategy, targeting higher resistance points. On the flip side, a bearish reversal, influenced by the broader economic picture or escalating geopolitical tensions, could see us exploring shorts, particularly if the DXY retreats from its recent peak.
Trade considerations: As the market digests the impacts of the retail sales report and ongoing international conflicts, we’re keeping a keen eye on the DXY’s response to these resistance levels and expecting the dollar to push further as inflation came in hotter than expected.