Dollar down again no matter what the Fed says; EUR/USD resumes its advance

The dollar is trading down against its major rivals as investors are digesting a not-that-good durable goods orders and they believe that the Fed will not do more hikes than the already priced in September.

On Friday, the DXY is bossing all gains performed on Thursday as the dollar index is trading 0.60% down on the day at 95.10 after testing the 50-day moving average at 95.00. Previously, the greenback rose to test the 95.60 area on Thursday.

Yields of the US 10-year reference bond declined and tested 2.83%.

Fed’s Jerome Powell affirmed in the Jackson Hole Symposium that he sees no risks of the economy overheating. He also considers that more hikes will be possible if growth accompanies. “Strong momentum in the US economy is expected to continue.” Inflation is expected to maintain in line with his expectations.

Earlier in the morning, the US Census Bureau reported that durable goods orders declined 1.5% in July, a deeper contraction that the 0.5% decline expected. The office reported a 0.7% increase in June.

Durable goods orders rose 0.2% in July, well below the 0.5% increase expected by market, but above the 0.1% rise posted in June.

July 2018 Advance durable goods orders

July 2018 Advance durable goods orders

According to the official release, “new orders for manufactured durable goods in July decreased $4.3 billion or 1.7 percent to $246.9 billion, the U.S. Census Bureau announced today. This decrease, down three of the last four months, followed a 0.7 percent June increase. Excluding transportation, new orders increased 0.2 percent. Excluding defense, new orders decreased 1.0 percent. Transportation equipment, also down three of the last four months, drove the decrease, $4.6 billion or 5.3 percent to $82.8 billion.”

Back to the chart, the DXY is currently trading at 95.10, falling 0.60% on the last day of the week. It is now testing the 50-day moving average and it seems to be ready for more drops. Technical conditions are weak for the Greenback and are suggesting more short-term bearishness.

DXY daily chart Dollar index august 24

DXY daily chart Dollar index august 24

To the downside, immediate support lies at the 95.00 area. Below there, traders should see for the 94.15 and 93.30 as next buying zones. To the upside, the pair needs to break above the 95.60 critical level. Above there, check for the 97.00 area as following selling area.

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