Dollar on Watch
The US Dollar is on watch today as traders prepare for a slew of key US economic readings with the ADP employment reading, Adv q/q GDP and core PCE all due today. Ahead of the data we’re seeing some better demand in the Dollar with DXY in the green across early European trading. However, on the back of the heavy selling we’ve seen in recent weeks, USD sentiment remains fragile and the greenback is vulnerable to a fresh move lower on any downside surprises today.
Today’s Forecasts
On the numbers front, the market is looking for the ADP figure at 114k down from 155k prior and core PCE at 0.1% from 0.4% prior. The big focus will be on the quarterly GDP reading, expected to crash to 0.2% from 2.4% prior. On the back of yesterday’s wider-than-forecast good deficit data, risks are skewed lower for the GDP print today with some chatter of a potential negative reading. If we do see a downside surprise in GDP today, this should keep USD anchored lower near-term with focus shifting back to Fed easing expectations with projections for a larger cut in June likely to rise.
Bullish USD Scenario
However, given the weak expectations ahead of the data, particularly the chatter around a potential downside surprise, there is room for USD to push higher today if GDP manages to top forecasts. Given the selling we’ve seen previously, any upside surprises today should help USD rebound through the back end of the week, particularly if we see any further positive trade-related headlines.
Technical Views
DXY
The index is attempting to break back above the bear channel lows and the 99.56 level. If bulls can get back above here, 100.38 will be the next resistance to watch ahead of a higher push towards 101.91 and the channel highs. To the downside, 97.76 remains key support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.