Dollar Pauses as Market Awaits Fed Signals

The US Dollar experienced a pullback on Friday, primarily driven by profit-taking after a recent surge. Investors are keenly focused on upcoming speeches by Federal Reserve officials, which could provide clues about the central bank’s monetary policy trajectory.

Housing Data Shows Weakness

Meanwhile, US housing data released earlier in the day revealed a decline in both building permits and housing starts, suggesting a potential slowdown in the housing market. Despite this, the broader economy has shown resilience, and the Fed has indicated that its policy decisions will be data-dependent.

Fed Speakers in Focus

Three Fed members, Raphael Bostic, Neel Kashkari, and Christopher Waller, are scheduled to speak on Friday. Investors will be closely watching their comments for any hints about the Fed’s stance on interest rates. The market is currently pricing in two 25 basis point rate cuts by the end of the year.

Technical Analysis

The US Dollar Index (DXY) has faced resistance near its 200-day Simple Moving Average, leading to a period of consolidation. Technical indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) suggest a neutral momentum.

Key Support and Resistance Levels

Support: 103.50, 103.30, 103.00
Resistance: 103.80, 104.00, 104.30