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US dollar extends gains as July PCE keeps Fed hike bets alive
The dollar index’s advance follows a hotter than expected July PCE reading and a Wednesday close above its 200-day moving average, with traders looking to Fed Chief Warsh’s Jackson Hole speech.
The US dollar index extended its recovery on Thursday after hotter than expected July inflation, with PCE data renewing expectations that the Federal Reserve could lean more hawkish for longer, providing fresh support for the greenback, according to Action Forex.
The outlet pointed to a technical shift as well, saying the dollar index broke and closed above its 200-day moving average at 98.99 on Wednesday, though it will need further upside to confirm the move, including a break above a 23.6% Fibonacci level at 99.16.
Action Forex also flagged nearby resistance and scenario triggers, noting pivotal barriers in the 99.50 to 100.0 zone tied to the 100-day moving average and Fibonacci levels, while warning that the daily technical setup remains bearishly aligned, with momentum below the centerline and multiple bear crosses.
Looking ahead, markets are awaiting Fed Chief Warsh’s speech at the Jackson Hole Symposium for more detail on the policy path, with the article citing wide expectations for unchanged rates in September and growing bets for a 25 basis point hike in December.
Latest closeDollar index 99.11 ▲0.2%