In the realm of U.S. equity markets, the dominant theme remains the Federal Reserve’s resolute hawkish stance, indicating an enduring era of monetary tightening.
In the realm of U.S. equity markets, the dominant theme remains the Federal Reserve’s resolute hawkish stance, indicating an enduring era of monetary tightening. This posture has cast a shadow over tech-heavy indices, as the spectre of heightened borrowing costs looms.
Concurrently, the U.S. dollar has emerged as the premier safe-haven asset, eclipsing both the yen and gold, especially when the United States grapples with the spectre of a government shutdown.
Meanwhile, the price of oil has staged a remarkable recovery, breaching the $90 mark. This resurgence comes on the heels of the market digesting the Federal Reserve’s monetary policy outlook.
Remarkably, it rides high on the back of robust oil fundamentals, despite the surprising uptick in U.S. crude oil stockpiles as the U.S. API report revealed.
Dollar Index
The US Dollar continued its robust performance, bolstered by climbing US bond yields. Despite a slew of underwhelming US economic data, including the Housing Price Index and Consumer Confidence Index, investors maintain a bullish stance, driven by expectations of Federal Reserve rate hikes. As the week progresses, market participants should keep a keen eye on upcoming economic data releases, particularly GDP figures, Initial Jobless Claims, and the PCE Price Index. These data points are poised to provide critical signals for future trading decisions.
The Dollar Index is trading higher while currently testing the resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 67, suggesting the index might enter overbought territory.
Resistance level: 106.25, 107.05.
Support level: 105.40, 104.25.
