USD Index Touches 107.60 And Makes Multi-Day Highs
USD index tracks the strength or weakness of the USD currency against a basket of other currencies. Recently, the USD index has touched 107.60 and has made new multi-day highs. This shows the strength of the USD against other currencies, such as EUR, JPY, ad GBP.
As for the reasons behind this strength of the USD, experts believe that it is due to the Fed speech and the FOMC minutes. Overall, this is the 3rd consecutive season that the USD index has managed to extend its bull run. And this time, the index even managed to break the 107.00 psychological resistance.
Hawkish Comments By Fed Speakers
Besides the dollar index, the US yields are also going through some serious upsides due to the comments made by Waller, Collins, and Bullard (FOMC Speakers). However, this also means that we can't expect any pivot in the policy of the FED in the near term.
So although it is a dollar and yield positive, it wouldn't be so good for the US equities. Especially the tech companies such as Meta and Facebook are already feeling the heat from a stronger dollar. A stronger dollar is hurting their sales in foreign markets such as Europe, Asia, and Africa.
Coming back to the topic of the USD index, well it seems that the index is now sitting comfortably above the 107.00 level, which is a strong signal of the bullish presence.
Looking ahead, it seems that the upcoming fundamental data from the USA will play a key role in whether we can expect a slowdown in the FED's policy or not.
As for the technicals, the next resistance is the 100-day SMA sitting at 109.18, followed by the 55-day SMA at 110.73. The next resistance is 113.14, which is the high made on 3 November.
On the downside, if the 105.34 level is broken, it would lead us to 105.11, where the 200-day SMA is present. And if that also fails, the next stop will be 104.63.