DXY: in the middle of the range between 105.50 and 101.30

 
 
 
 
 
 
 

Despite the continued positive dynamics, the DXY dollar index is in no hurry to resume its growth, while the stock market continues its upward correction after an impressive decline since the beginning of this year.

Thus, futures for major US stock indices opened today's trading day in positive territory, continuing the growth that emerged last week (on June 16, the US broad market index S&P 500 reached a local support level 3645.0, falling from 4810.0 mark, reached at the very beginning of this year).

S&P500 Chart

One of the factors that contribute to the growth of stock indices is probably the balancing of the portfolio by investment fund managers at the end of the month, quarter and half a year, and this week is just that - a transition between June and July, the 2nd and 3rd quarters and the 1st and 2nd half-years. In view of this, it is possible that the corrective upward dynamics in the stock market will remain in force until the end of this week. This, in turn, will contribute to the weakening of the dollar this week, especially if this weakening is supported by weak macro statistics from the US.

In particular, today (at 12:30 GMT) is expected to publish fresh data on orders for durable goods and capital goods (excluding defense and aviation) in the US.

Growth in such orders is expected to slow sharply in May (to 0%), from +0.5% and +0.4% in April, respectively. The market reaction to the negative value of the indicators may be negative for the dollar in the short term. Data worse than the previous value and/or the forecast will also have a negative impact on dollar quotes.

A little later (at 14:00 GMT) statistics on the number of pending home sales in the US for May will be published. This indicator shows the change in the number of houses prepared for sale, but still waiting for the contract to close. This is one of the most important indicators for the US real estate market, which also characterizes activity in the construction sector of the economy, and the sale of a house causes a wide-ranging associated effect: repairs, mortgages, brokerage and banking services, transportation, etc.

This is also expected to worsen. A poor result and a relative decline usually has a negative impact on the USD.

DXY Chart

As for the dynamics of the DXY dollar index, DXY futures are falling again today. So, at the time of publication of this article, they are traded near 103.62 mark, 195 points below the local multi-year high of 105.57, reached in the middle of this month.

In general, the positive dynamics of DXY still remains. Successive breakdown of the local resistance levels 104.00, 105.00, 105.57 will create the prerequisites for growth towards multi-year record highs 121.29 and 129.05, reached, respectively, in June 2001 and November 1985.