The U.S. Dollar Index is currently stuck in a short-term sideway
The U.S. Dollar Index is currently stuck in a short-term sideways pattern with mixed signals from fundamental and technical perspectives. The upcoming week's economic calendar includes a series of high-impact data releases and events that could potentially increase volatility in the market.
The main event in the U.S. next week is the Federal Reserve's policy decision, and markets are currently expecting Chair Powell to keep interest rates unchanged. Fed Funds futures indicate a probability of around 60% for the Fed to maintain the current level at 500-525 basis points, taking into account the possibility of a rate hike at the July meeting.
However, in recent days, the probability of a rate hike in July has increased noticeably. Future probabilities also suggest that the Fed will hold rates at this higher level during the September meeting before gradually reducing the Fed Funds rate to the 500-525 range for the rest of the year.
U.S. Treasury bond yields rose sharply yesterday, partly influenced by interest rate hikes by the Reserve Bank of Australia and the Bank of Canada. While neither central bank was expected to increase borrowing costs, both cited higher-than-expected inflation as a factor in their decisions.
Volatility remains low, and the three moving averages show a mixed outlook. The 20-day simple moving average is trending higher, while the longer-term 200-day simple moving average is slowly moving lower. Short-term support is seen around 101.35, with resistance around 104.50.
The main event in the U.S. next week is the Federal Reserve's policy decision, and markets are currently expecting Chair Powell to keep interest rates unchanged. Fed Funds futures indicate a probability of around 60% for the Fed to maintain the current level at 500-525 basis points, taking into account the possibility of a rate hike at the July meeting.
However, in recent days, the probability of a rate hike in July has increased noticeably. Future probabilities also suggest that the Fed will hold rates at this higher level during the September meeting before gradually reducing the Fed Funds rate to the 500-525 range for the rest of the year.
U.S. Treasury bond yields rose sharply yesterday, partly influenced by interest rate hikes by the Reserve Bank of Australia and the Bank of Canada. While neither central bank was expected to increase borrowing costs, both cited higher-than-expected inflation as a factor in their decisions.
Volatility remains low, and the three moving averages show a mixed outlook. The 20-day simple moving average is trending higher, while the longer-term 200-day simple moving average is slowly moving lower. Short-term support is seen around 101.35, with resistance around 104.50.