- The US Dollar remains steady following the US market’s opening on Thursday.
- US Retail Sales data showed mixed results, while weekly Jobless Claims were impacted by the Los Angeles wildfires.
- The US Dollar Index (DXY) hovers near 109.00, showing little movement in either direction.
The US Dollar Index (DXY), which measures the Greenback’s performance against six major currencies, continues to consolidate around 109.00 on Thursday. This comes after the release of mixed US Retail Sales and weekly Jobless Claims data, leaving traders without a clear direction. Retail Sales saw upward revisions for the previous month but fell short of expectations, while Jobless Claims were influenced by the Los Angeles wildfires.
Later today, the National Association of Home Builders (NAHB) Housing Market Index for January will be released. No significant market impact is expected, though high interest rates could weigh on housing market sentiment.
Market Movers: Thursday Highlights
- Retail Sales and Jobless Claims:
- Retail Sales grew by 0.4% in December, missing the expected 0.6%, though November’s figure was revised up from 0.7% to 0.8%.
- Initial Jobless Claims rose to 217,000 for the week ending January 10, above the revised 203,000 from the previous week.
- Philadelphia Fed Manufacturing Survey:
- Surprised to the upside, improving to 44.3 in January from a revised -10.9 in December.
- NAHB Housing Market Index:
- Scheduled for release at 15:00, with expectations for a slight dip to 45 from the previous 46.
- Equities are sliding as traders take profits from Wednesday’s disinflation-driven rally.
- The CME FedWatch Tool shows a 97.3% probability that the Federal Reserve will hold interest rates steady at its January meeting.
- The US 10-year Treasury yield has declined to 4.653%, down from a weekly high of 4.807% on Tuesday.
DXY Technical Outlook: Consolidation or Correction?
The US Dollar Index is at a crossroads, balancing between extending its rally or facing a deeper correction. While recent disinflation data might seem favorable, the Federal Reserve remains cautious. Inflation could rebound, potentially driving the DXY higher.
Key Levels to Watch:
Resistance:
- Immediate resistance remains at 110.00, with further hurdles at 110.79 and the October 2022 double top at 113.91.
Support:
- Nearby support lies at the ascending trendline around 108.95. A break below this level could target 107.35, with further support at 106.52 and interim support at the 55-day SMA at 107.10.
The DXY’s performance hinges on upcoming data and market sentiment, as traders navigate mixed economic signals and potential policy shifts.
