Dollar Index Surges On upbeat US data

In reaction to the soaring US Treasury bond yields and expectations of Fed tightening, the US Dollar Index rises by 0.37%. EMAs are below the current values in DXY’s consolidation, and the RSI has crossed the neutral line, signalling positive momentum. DXY aims for resistance at the 200-day EMA at 103.631, then seeks 104.000 with the chance to rise to the high of May 31.

Following US economic data that supported further tightening by the US Federal Reserve (Fed), the Dollar Index increased by 0.37% on Thursday. This increase was supported by higher US Treasury bond yields. Since the DXY reached a two-week high of 103.437, it is currently trading at 103.351.

When viewed through the lens of a daily chart, the DXY is in a state of consolidation, with shorter-term Exponential Moving Averages (EMAs) below its pricing and the 200-day EMA slightly above its current value of 103.631. Additionally, the year-to-date (YTD) low of 100.788 was not broken, which allowed for a rebound that peaked near the high of 104.699 on May 31.

The next resistance level will be the 104.000 mark, which will be reached if the DXY moves above the 200-day EMA at 103.631. After the May 31 high is breached, the DXY may rise towards it before the dollar is tested by a downslope resistance trendline drawn from the top of the previous year that passes close to 104.700/850. After being overcome, the year-to-date (YTD) high of 105.883 would be the next barrier before the DXY began to rise towards the 106.000 level.

In terms of oscillators, the three-day Rate of Change (RoC) indicates that buyers are gaining traction as the Relative Strength Index (RSI) recently rose above the neutral line, sending a positive signal.