- The US dollar index acquires the land to nearly 103.60 in the early European session on Tuesday, an increase of 0.14 % a day.
- The negative view of the index remains in playing with the RSI Dreaming Index.
- The first support level to watch is 103.35; The immediate resistance level is seen at 104.10.
The US dollar index (DXY), an indicator of the US dollar value (USD) against a basket of six global currencies, regains some of the lost land to approximately 103.60 during the early European session on Tuesday. Greenback’s potential upward trend may be limited amid fears that US President Donald Trump’s tariff policies can lead to a wider economic slowdown.
Federal Reserve’s interest rate decision will be in the spotlight on Wednesday, without any change in the expected rate. According to the CME Fedwatch tool, market prices have lost about 60 % for price discounts, which is slightly more than two discounts, for the rest of the year.
According to The Daily Chart, the declining feelings of DXY remain intact because the indicator maintains less than 100 days moving average (EMA). Moreover, the landfill is supported by the 14 -day relative index (RSI), which stands without the midfield near 31.50, which supports sellers in the short term.
The primary support level of the dollar index appears at 103.35, the lowest level on March 17. To the south, the next competition appears in 102.20, which is the minimum bollinger range. The additional negative side to watch is 100.53, the lowest level on August 28, 2024.
On the bright side, the first bullish barrier of DXY is located at 104.10, the highest level on March 14. Any purchase of follow -up above this level can pave the way to 106.15, EMA for 100 days. A decisive break above the aforementioned level can be seen to 107.38, the highest level on February 19.
The US dollar index (DXY) daily chart
Questions and answers in US dollars
The USD (USD) is the official currency of the United States of America, and a “reality” currency for a large number of other countries where there is a circulating alongside local notes. It is the most trading currency in the world, as it represents more than 88 % of the rotation of global foreign currencies, or on average $ 6.6 trillion in transactions per day, according to data from 2022. In the aftermath of World War II, the United States took over the British pound the world reserves. For most of its history, the US dollar was backed by gold, even the Bretton Woods agreement in 1971 when the golden standard went.
The most important individual factor that affects the value of the US dollar is the monetary policy, which is formed by the Federal Reserve (Fed). The Federal Reserve has two states: to achieve price stability (control of control) and enhance full employment. Its primary performance to achieve these two goals is to adjust interest rates. When prices rise very quickly and inflation is 2 % higher than the Federal Reserve goal, the Federal Reserve will raise rates, which helps the value of the dollar. When inflation decreases to less than 2 % or the unemployment rate is very high, the Federal Reserve may reduce interest rates, which weighs to green.
In maximum situations, the Federal Reserve can also print more dollars and quantitative mitigation (QE). QE is the process that the Federal Reserve increases significantly from the flow of credit in a suspended financial system. It is a measure of the non -standard policy used when the credit is dry because banks will not lend to each other (for fear of failing to pay the opposite end). It is the last resort when it is unlikely to achieve interest rates simply the necessary result. The Federal Reserve is the preferred to combat the credit crisis that occurred during the great financial crisis in 2008. The Federal Reserve Printing includes more than dollars and their use to buy US government bonds mostly than financial institutions. QE usually leads to the weakest US dollar.
The quantitative tightening (QT) is the opposite process in which the Federal Reserve stops buying bonds from financial institutions and does not invest the manager from the bonds he holds in new purchases. It is usually positive for the US dollar.
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