Dxy Trades Above Support

 Dxy Trades Above Support

Us Dollar Index (Dxy) Trades Above 106 Handle

After some initial turbulence, the DXY ended the week near the 106.09 handle. A close above the 106.00 level was of significance as it will allow the DXY to now look towards 106.52 and the 107.00 resistance levels.

At the time of the US GDP release and the inflation data, the DXY price action showed a lot of noise and eventually closed at 106.09. At the start of the week, the DXY opened at 106.10 which suggests that the index ended the week with -1 points loss.

After looking through the data, many experts cited that the economy is going through stagflation. This allowed the equities to turn higher and eventually weighed heavily on the USD, but it still doesn't mean that rate cuts are out of the equation.

Dxy Ends The Week Unchanged

Elsewhere, the PCE index was also released, which included surprises in the form of personal spending and income. The data showed that personal spending is still high, which means there are still some roadblocks before the inflation turns lower.

Although the DXY has managed to close the week with a -1-point change, it still doesn't change the fact that DXY failed to stage an impressive rally.

According to experts, the Fed is now faced with some tough decisions as the economy is slowing down while inflation is rising. A scenario of stagflation will leave the Fed unable to move with its rate-cut plan. At the same time, higher interest rates will put further pressure on GDP growth.

Next up, the key resistance zones to watch out for include the 106.52, 106.70, and 107.00 handles. Once all these levels are claimed by the dollar bulls, the next target to conquer will be the 3rd Oct high near 107.35.

look at the downside shows that the nearest support is at 106.00 and 105.50. If both of these levels are pierced by the DXY sellers, the next stop will be the 105.12, followed by the 104.60 level.

It is also important to note that dynamic supports in the form of the 200 SMA and the 55 SMA are also present along the way.

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