USD Price Analysis: Finding Support Ahead of Q2 US GDP Print
USD – Price, Chart and Technical Analysis
- US Q2 GDP expected to confirm robust growth.
- The US dollar faces congestion to the upside.
The DailyFX Q3 forecast and analysis of the US Dollar is available to download here.
USD Likely to Remain Supported by Strong Economic Fundamentals
The greenback is currently in the process of reclaiming all of yesterday’s losses and pushing back into a confluence of technical indicators. Today’s US Q2 GDP release (2nd look) is expected to show the economy growing at 4% q-o-q, compared to original estimations of 4.1%, adding to expectations that the Fed will hike interest rates by 0.25% at both the September and December meeting. Consumer confidence in the US remains firm, witnessed by Tuesday’s Consumer Confidence 17-year high – 133.4 vs expectations of 126.6 and an upwardly revised July reading of 127.9 – and while growth may slow moving forward, the recent round of tax cuts may continue to filter through and support the economy.
The US dollar index (DXY) currently trades around 94.42 after touching a one-month low on Tuesday at 94.00. Ahead lies a cluster of technical indicators that will need to be broken decisively if the greenback is to push further ahead. The 50-day moving average is at 94.67, the June 21 and 28 double tops are at 95.19 just ahead of the 20-day ma at 95.27. If these levels are cleared and closed above, the US dollar may well look at the August 15 high at 96.60, although it may need additional strong economic news to breach this level. Downside protection remains at 94.00 (38.2% Fibonacci retracement) ahead of a cluster of old highs around 93.85
US Dollar Index (DXY) Daily Price Chart (November 2017 – August 29, 2018)
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--- Written by Nick Cawley, Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.