US Dollar bulls find support at $90 on renewed USD enthusiasm
- Next week’s Eurozone CPI can affect the US Dollar Index (DXY).
- The DXY jumped from $89 to $90 this week.
The US Dollar Index (DXY) is trading at around $90.11 slightly up on Thursday as the DXY is consolidating after the massive breakout seen on Wednesday on the back of a confluence of positive factors.
Next week will see the Eurozone inflation data with the Consumer Price Index, on Wednesday. The news might influence the US Dollar as the Euro weighs more than 57% in the US Dollar Index (DXY) which is comprised of a basket of six currencies.
The US Dollar Index has seen a wave of renewed enthusiasm since Tuesday as a confluence of factors are benefiting the greenback. The end of the month and end of the quarter position squaring from market participants is one of them. Fears of a full-out trade war between the US and China seem to have dissipated as the two parts said they were willing to negotiate, and the risk-on mood came back. On Wednesday the US Gross Domestic Product came in above expectations and the DXY posted one of its best daily advance seen in weeks. The buck posted its biggest gain against the Yen, closing up 1.45%, while Gold saw its worst one-day percentage decline since July 3, 2017, losing not less than 1.5% on Wednesday. However, stocks are still under pressure with the S&P 500 still trading at yearly lows below its 200-period simple moving average.
DXY daily chart
The DXY is still trading in a range and is in an overall bear trend with both the 100 and 200-period moving average trading above the current level. Next resistance is seen at $90.42 last swing high, followed by $91 swing high. To the downside, support is seen at $86.6 previous supply/demand zone, followed by $89 swing low.