The US dollar index retreated slightly on Tuesday after the strong housing and consumer confidence data from the US. Focus now shifts to the upcoming jobs numbers from the United States that will come out in the next three days. It is trading at $101.7, which is about 0.40% above the lowest level this month.
US jobs data ahead
The DXY index retreated slightly after the Conference Board published weak but better-than-expected consumer confidence data.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
The numbers showed that the country’s consumer confidence declined from 108.6 in April to 106.4 in May. This increase was better than the median estimate of 103.9.
The main concern among most Americans is inflation. Data published in May revealed that the country’s inflation remained at the highest level in over 40 years.
Another concern is that the labor market is starting to cool. Indeed, in May, companies like Target and Walmart warned that they had over-hired and that they will start layoffs.
The dollar index also reacted to the strong housing data. The house price index rose by 19.0% on a year-on-year basis in March. This was slightly below the previous 19.3%. Still, there are concerns that the sector is seeing some slowdown after the weak new and existing home sales data published last week.
The next key catalyst for the DXY index will be the upcoming US jobs numbers. The official non-farm payrolls (NFP) data will come out on Friday. Analysts expect the data to show that the unemployment rate remained at 3.5% while hiring slowed.
The Bureau of Labor Statistics will publish the latest job vacancies data on Wednesday and the latest initial jobless claims numbers. Still, these numbers will unlikely change the Federal Reserve’s tightening policies.
US dollar index forecast
The DXY index has been in a strong bearish trend in the past few weeks. It managed to move from the monthly high of $105 to the current $102. On the 4H chart, the pair has moved below the 25-period exponential moving averages while the Relative Strength Index (RSI) has moved to the neutral level at 50.
The index moved slightly below the important resistance level at $102.33. Therefore, the index will likely continue falling as bears target the next key support level at $100 as shown above.
Where to buy right now
To invest simply and easily, users need a low-fee broker with a track record of reliability. The following brokers are highly rated, recognised worldwide, and safe to use:
- Etoro, trusted by over 13m users worldwide. Register here >
- Capital.com, simple, easy to use and regulated. Register here >
*Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.
Source: https://invezz.com/news/2022/05/31/heres-why-the-us-dollar-index-dxy-price-could-crash-to-100/