US DOLLAR PRICE OUTLOOK – US DOLLAR TURN HIGH AFTER CONSUMER SENTIMENT, RETAIL SALES BEAT MARKET EXPECTATIONS
- US Dollar largely fueled by the volatility of the market elicited by the fiscal stimulus talks
- DXY index advance following the monthly consumer sentiment data and retail sales
- US Dollar price rally getting weakened by its major peers like the GBP and EUR
The US Dollar seems to try to turn high as the DXY price rally bounces off bout lows. The monthly US consumer sentiment data and retail sales recently crossed the market wires that both beat the market estimates. The broader US Dollar index rose after last month’s retail sales report showed a 1.9% boost in expenditure Month on Month. This did not just top the economist forecast looking for the 0.7% surge, it also marked an increase from 0.6%.
The initial consumer sentiment data sequentially increased to 81.2 from 80.4 that topped the expectations of the market. Despite the volatility of the market stemming from election uncertainty and fiscal stimulus, the boost in consumer sentiment might be improving the US Dollar against its major peers like the sterling pound and the Euro that has lately faced headwinds because of the mounting covid-19 concerns and the recent Brexit drama.
US DOLLAR INDEX CHART
However, the US Dollar price rally is still trading today based on the broader DXY index. The US Dollar seems to have struggled to reclaimed the previous 94.00 price mark highlighted by the August swings highs and September closing range. The bearish trendline extended via an array of lower highs rose on September 25, May 15, and March 19 also had the potential to keep the DXY index under intense pressure.
The month to date lows and the 50-day SMA stand out as likely layers of defense that will stymie US Dollar selling. Breaching the key support zone might inspire the USD bears to nudge the USD towards the multi-year lows close to the 92.10 levels. On the other hand, eclipsing the 94.0 level could inspire the bulls to have a quick look at Septembers swing high ahead of the 96.00 levels as S&P 500 Index Falls With Hopes of Stimulus.
That said, it seems like the market sentiment is eyeing the fiscal stimulus talks, which is one of the drivers catapulting the USD. Increased odds of a Democratic win in November increase the possibility of a larger covid-10 stimulus aid in early 2021. However, this might keep the US Dollar down. Also, the resurgence of trader uncertainty around the November election and the fiscal stimulus aid may send the S&P 500 index higher.