The US Dollar regained strength on Thursday, reversing earlier losses triggered by concerns voiced by central banks about its recent dominance. This resilience highlights prevailing US economic outperformance.
Key Factors:
- Robust US Data: Strong Jobless Claims and Philadelphia Fed Manufacturing Survey data boost the USD, reinforcing market expectations for higher US interest rates.
- Central Bank Worries: Despite concerns expressed by the ECB, Japan, and South Korea about the USD’s impact on their currencies and inflation, the fundamental outlook for the USD remains positive.
- Fed Speakers and Data: Upcoming economic indicators and comments from Fed officials could further fuel the USD’s momentum.
Technical Analysis:
- Rate Hike Sentiment: Comments hinting at potential rate hikes rather than cuts add fuel to the USD’s rally.
- Key Resistance: The USD could face resistance at 106.52 (recent high) and potentially 107.35 (October 3 high).
- Support Levels: Initial support lies at 105.88, followed by 105.12 and 104.60. The region containing the 55-day and 200-day SMAs (104.17 and 103.91) offers additional support.
