- The US dollar index recovers some lost land to nearly 103.50 in the early European session on Wednesday, adding 0.21 % a day.
- The negative expectations of the index remain healthy less than EMA for 100 days with the RSI Race Mode.
- The goal of the first negative side to watch is 103.20; The first bullish barrier appears at 104.10.
The US dollar index (DXY), an indicator of the US dollar value (USD), attracts measuality against a basket of six global currencies, some buyers to about 103.50 during the early European session on Wednesday. Traders are preparing for the Federal Reserve’s interest rate (Fed) later on Wednesday, unchanged in the rate.
The new economic expectations will be closely monitored by federal reserve officials because they may provide some hints on how politicians see the potential impact of US President Donald Trump’s administration policies.
Technically, the DXY expectations remain in place, which features an index that is fixed below the 100 -day SIA moving average (EMA) on the daily time frame. The lower resistance path is the negative aspect as the 14 -day relative strength indicator (RSI), which stands without the midfield near 31.15, supports sellers in the near term.
In the declining event, March 18 level works at 103.20 as a preliminary support level for the US dollar index. The level of the decisive dispute of viewing is 102.00, and it represents the psychological level and the minimum Bollegerer. The extended losses can be witnessed to 100.53, the lowest level on August 28, 2024.
On the bright side, the immediate resistance level of DXY appears at 104.10, the highest level on March 14. To the north, the next obstacle is seen at 105.45, the highest level on November 6, 2024. Any purchase of a follow -up above this level can see a rally to 106.10, which is 100 days EMA.
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. It includes the printing of the Federal Reserve more dollars and their use to buy US government bonds mostly from 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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