Soaring US Treasury yields and expectations of Federal Reserve rate hikes are powering the US Dollar‘s ascent. Recent robust data, like the uptick in US core Durable Goods Orders, has solidified the Dollar’s position. Gold has experienced a significant selloff.
The U.S. dollar continues its relentless ascent, fueled by soaring Treasury yields and expectations of Federal Reserve rate hikes. Recent data, including a robust uptick in U.S. Core Durable Goods Orders, further solidify the dollar’s position. Gold, in contrast, has dimmed as it hits a six-and-a-half-month low, succumbing to the pressure of rising yields and a strong dollar. Oil prices surged on bullish inventory data despite the dollar’s rise. The Dow faced headwinds from surging Treasury yields, while the Pound Sterling‘s decline reflects a bleak UK economic outlook. AUD/USD and Japanese yen remain in the grip of the dollar’s dominance.
Dollar index
The U.S. dollar’s meteoric rise persists, bolstered by a relentless surge in the U.S. Treasury yields. These yields have recently scaled impressive heights not witnessed since the heady days of July 2007, signalling a seismic shift in the financial landscape. Further emboldening the greenback’s ascent are robust economic indicators. The Census Bureau’s revelation of an impressive uptick in U.S. Core Durable Goods Orders, from a meagre 0.10% to a substantial 0.40%, surpassed market forecasts.
The Dollar Index is trading higher while currently testing the resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 77, suggesting the index might enter overbought territory.
Resistance level: 106.95, 108.65.
Support level: 105.25, 103.15.
XAU/USD
Gold, traditionally considered a safe haven in times of market turbulence, has recently witnessed its lustre fade. The precious metal tumbled to a six-and-a-half-month low, after breaking the psychologically significant support level of $1900 per troy ounce. This downward spiral is largely attributed to the relentless surge in U.S. Treasury yields and the commanding performance of the U.S. dollar.
Gold prices are trading lower while currently testing the support level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 28, suggesting the commodity might enter oversold territory.
Resistance level: 1885.00, 1900.00.
Support level: 1875.00, 1855.00.
GBP/USD
Pound Sterling has been plagued by a downward trajectory, weighed down by a gloomy economic forecast. Experts anticipate that the UK’s economic woes, compounded by persistent inflation and a labour shortage, will result in contractions in both 2023 and 2024. In stark contrast, the Eurozone and the United States appear poised for growth during these periods. This lacklustre economic outlook for the UK is expected to continue to pummelled the value of Pound Sterling.
GBP/USD is trading lower following the prior breakout below the previous support level. However, MACD has illustrated increasing bullish momentum, while RSI is at 77, suggesting the pair might enter oversold territory.
Resistance level: 1.2190, 1.2370.
Support level: 1.2040, 1.1935.
