The US dollar gives up gains after two-year highs, ending the week strongly

On Friday, November 22, the US dollar index fell below 108.00.
DXY retreats from 2-year high despite forceful S&P PMI data; profit taking and the Chinese stimulus package are contributing to the slowdown.
Fed officials remain cautious as Barkin cites the risk of inflation and Williams points to a potential interest rate cut.

The US Dollar Index (DXY) fell slightly during Friday’s session after hitting a recent two-year high amid geopolitical instability. However, forceful S&P PMI data reinforced the relative resilience of the U.S. economy, supporting DXY’s gains.

The decline in the value of the US dollar was attributed to profit-taking and positive economic indicators from China, including an interest rate cut and a comprehensive stimulus package. As a result, DXY retreated above 108.00, stabilizing around 107.50.

DXY, which values the dollar against a basket of major currencies, maintains a bullish bias, driven by solid economic data and a less dovish stance from the Federal Reserve (Fed). Despite the reversal, the upward trend remains unchanged, and investors now expect a gradual pace of interest rate cuts. Technical indicators suggest potential consolidation, but the overall uptrend remains forceful.

Daily Market Change Summary: US Dollar Holds Gains After PMI Data, Profit Taking

The US dollar index fell after hitting a recent two-year high due to geopolitical instability and profit-taking.
DXY found support in the form of forceful S&P PMI data indicating the resilience of the US economy.
Positive economic news from China, such as an interest rate cut and stimulus package, contributed to the weakening of the DXY.
As for data, according to November’s preliminary estimates, the PMI index of the American agency S&P Global Composite increased by 1.2 points, to 55.3.
The S&P Global Manufacturing PMI improved slightly from 48.5 in October to 48.8, but continues to decline.
The S&P Global Services PMI rose significantly from 55 to 57, indicating continued growth.

DXY Technical Outlook: Index Consolidates After Reaching 108.00

DXY showed signs of weakness after reaching 108.00 as investors took profits. Technical indicators, particularly the Relative Strength Index (RSI) and Moving Average Divergence (MACD), indicate overbought conditions, suggesting a possible minor correction in the index. Nevertheless, the index remains supported by good economic data and hawkish Fed rhetoric, maintaining an overall upward trend. The uptrend is currently facing resistance around 108.00 and support at 106.00-105.00, and profit-taking and risk-off sentiment could potentially lead to pullbacks or consolidation in the compact term.