The U.S. dollar index was lower on the day as traders pause ahead of retail sales and consumer data. The greenback was lackluster after Thursday saw disappointing jobs data, whilst the potential for another blockbuster stimulus package still weighs on the U.S. currency.
The dollar has been on a rally since Tuesday after inflation figures for the United States economy came in as expected at 1.4%. The number was higher than the 1.3% seen in the month previous and kept the potential of higher prices that could see the Federal Reserve’s plan for low rates into 2023 impacted.
Retail sales today are expected to come in at 0.7%, whilst Michigan Consumer Sentiment is expected to come in at 80.5. Yesterday saw jobless claims in the U.S. register 898k new unemployment claims, compared to the 825k expected. The numbers took some steam out of the dollar and traders will await today’s numbers for a clearer picture.
Talks over a second stimulus package have stalled but the dollar is getting no respite as the passage of another deal close to $2 trillion is widely expected, even if it comes soon after the election. President Trump is considering a higher package than the $1.8 trillion he proposed at the start of the week but the outlook is still cloudy over the details and timeframe so the U.S. dollar will focus on near-term data for now.
Dollar Index Technical Outlook
The dollar’s move higher on Tuesday was a reversal pattern and the fact that it also closed above the moving average was a sign of further gains. The index has found resistance at the same level where an October rebound failed. This will define the next path for the U.S. dollar. If you require assistance with risk/reward and trade entry, then please consider the Investing Cube Forex Trading Course or one-to-one coaching.