US Dollar Index Technical Analysis: 104.00 as magnet

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The US Dollar Index (DXY) has not moved much and is set to close the week with a minor gain. The divergence between Fed speakers commenting on Fed rate cuts and recent inflation data opening the possibility of another rate hike is creating a vacuum in which the US Dollar is unable to move. It looks like traders will keep their powder dry until next week, when the  US Jobs Report will be released and Fed’s Chairman Jerome Powell will testify in Congress. 

To the upside, the 100-day Simple Moving Average (SMA) near 103.97 has been broken for now and should not see a retest anywhere later this Friday. Should the US Dollar be able to cross 104.60, 105.12 is the next key level to keep an eye on. One step beyond there comes 105.88, the high from November 2023. Ultimately, 107.20 – the high of 2023 – could come back into scope. 

Looking down, the 200-day Simple Moving Average at 103.74 has been broken twice recently, making it a weak support. The 200-day SMA should not let go that easily though, so a small retreat back to that level could be more than granted. Ultimately, should it lose its force, prices could fall to 103.16, the 55-day SMA, before testing 103.00


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