The US Dollar (USD) remains on a subdued tone on the last trading day of 2023. The US Dollar Index (DXY) is positioned at 101.30, shedding daily gains as dovish bets on the Federal Reserve (Fed) weigh heavily on the Greenback. Soft Chicago PMI figures for December also added pressure to the currency on a quiet Friday. The Federal Reserve’s dovish stance, welcoming cooling inflation figures, ruling out rate hikes in 2024, and forecasting 75 bps of easing recently drove demand out of the US Dollar to riskier assets. As for now, the market is anticipating a rate cut in March with an additional adjustment in May. Next week, the US will release key labor market data, which will help investors place their bets for the next Fed decisions.Daily digest market movers: US Dollar trades soft as dovish bets and poor December Chicago PMI add pressure
Technical Analysis: DXY index bearish pressure persists despite potential for a minor correctionThe indicators on the DXY daily chart reflect a predominantly bearish sentiment. With the index considerably below its 20, 100, and 200-day Simple Moving Averages (SMAs), the bears appear to be in control on the broader scale. This is further emphasized by the Relative Strength Index (RSI) nearing oversold conditions, which aligns with the overall index’s bearish outlook.The Moving Average Convergence Divergence (MACD) showcases rising red bars, demonstrating a slight surge in selling pressure. This might trigger a conservative buying signal for contrarian investors looking to seize an opportunity in this oversold market condition. In short, the selling momentum seems to dominate, but due to the oversold RSI and rising MACD red bars, a minor upward momentum can be expected. Support levels: 100.70, 100.50, 100.30.
Resistance levels: 101.30, 101.50, 101.70.More By This Author:S&P 500 Consolidates As US Dollar And Yields Recover EUR/USD Paddles Near 1.1050 To Round Out 2023 GBP/USD Spreads Ahead Of The 2023 Closing Bell