US Dollar Gains Traction: Technical Analysis Points to Potential

4 בדצמ׳ 2023

US Dollar Gains Traction: Technical Analysis Points to Potential Bullish Impulse

The US Dollar (USD) is showing signs of recovery, hovering around the 103.30 level, with US yields rebounding from Friday's dip. The focus shifts to the upcoming Factory Orders report in the US economic calendar. Despite a recent bearish performance, the USD has regained buying interest, bouncing back from the 103.07 area tested earlier during Monday's Asian trading hours.

Ongoing speculation surrounds the Federal Reserve's potential interest rate reductions in the spring of 2024, with varying opinions among certain Fed policymaking members.

Key Points to Consider Regarding the USD:

Consolidative Phase: The index appears consolidative in the low-103.00s, finding stability after hitting three-week lows near 102.40 last week.

Broader Picture: The dollar seems under pressure due to growing speculation of interest rate cuts in H1 2024, responding to disinflationary pressures and a gradual labor market cooldown.

Support for the Greenback: Despite challenges, the USD receives some support from the resilience of the US economy and a persistent hawkish narrative from select Fed rate setters.

Technical Analysis:
In the H4 timeframe, the price initiated a retracement after reaching the 102.50 area. This retracement may deepen, targeting a retest of resistance at 104.215 or potentially surpassing it to reach the next level of interest at 105.000. Notably, the USD remains in a bearish momentum, and in the D1 timeframe, the price touched the 61.8% Fibonacci level.



Our Forecast:
Our analysis points to a potential bullish impulse, with a target set at 104.215. Traders are advised to monitor the technical indicators and market developments for informed decision-making.

Alternative Scenario: