The USD Index has reversed its earlier losses on the day and is now trading marginally higher. Having barely violated the resistance at 92.803, today’s candle is critical to deciding on whether this price level has been taken out by bulls or not.
A relatively quiet day on the economic news calendar means that the USD Index is relying on other fundamentals, which for the most part have been all about the US Dollar.
Nordea Bank has come out today to say that interest rates are too low when compared with the economic growth outlook, which could be an opinion that the Fed could start its raising cycle earlier than the 2023 planned liftoff date. This point seems to have been made by the President of the Philadelphia Fed Reserve Bank. Patrick Harker in a Bloomberg TV interview on Friday.
Harper was quoted as saying that it was possible to “reach herd immunity by fall,” and that it was “a good sign in some ways that 10-year yields are going up” Citing the market optimism created by the rising bond yields, Harker added that there were some risks in keeping rates low for too long.
Technical Levels to Watch
The resistance level at 92.803 remains intact but is under severe risk of being uncapped by bullish action. A break of this area opens the door towards the 93.173 price level, with 92.805 remaining a far-fetched but potential upside target.
On the flip side, bears would hope that the 92.803 resistance stands firm, allowing for a potential rejection and pullback move that targets 92.50. the 91.906 and 91.50 support targets remain viable, and their viability could be increased if 92.500 gives way.
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DXY Daily Chart
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