According to Golden Finance, the financial market is highly volatile. The US dollar index DXY experienced significant fluctuations in today’s trading, falling below the 99 mark. As of now, the intraday decline has reached 0.22%.
The US dollar index, as an important indicator to measure the comprehensive value of the US dollar against a basket of major currencies, has always been closely watched by global investors. This index is calculated by weighted average of the exchange rates of six major currencies, namely the euro (with a weight of 57.6%), the Japanese yen (with a weight of 13.6%), the British pound (with a weight of 11.9%), the Canadian dollar (with a weight of 9.1%), the Swedish krona (with a weight of 4.2%), and the Swiss franc (with a weight of 3.6%). As the euro accounts for the largest proportion among them, the fluctuations of the euro have the most significant impact on the US dollar index.
Judging from the recent market dynamics, the recent drop of the US dollar index below 99 is not an isolated event. Previously, the ADP private employment report in the United States in May increased by only 37,000, far lower than the expected 114,000. The release of this data became one of the triggers for the shift in market sentiment. Although the ADP report is not a reliable guide to Friday’s employment data, short sellers took this opportunity to return to the US dollar market. After the data was released, the short-term decline of the US dollar index DXY expanded rapidly. Today, under the interweaving of a series of complex factors, the US dollar index further declined and eventually broke through the 99 mark.
From a technical analysis perspective, the current trend of the US dollar index shows certain weak characteristics. Observing the K-line chart in the past four hours, the price has dropped significantly compared to the previous trading day, and the last K-line is bearish. The closing price is lower than the opening price. In terms of trading volume, it has decreased recently. However, when prices rise, the trading volume drops, indicating a weakening upward momentum. Based on MACD analysis, there is no obvious trend in the current market. The MACD bar chart remains positive but is gradually shortening, indicating that the strength of multiple forces is weakening. In addition, the KDJ indicator indicates that the current market is in an overbought state, with a KDJ value of 95, showing an overall downward trend. From the perspective of support and resistance levels, the recent support level is around the price 144.0, while the resistance level is around the price 156.0.
The decline of the US dollar index has had a wide-ranging impact on the global financial market. In the foreign exchange market, major non-US currencies took the opportunity to rise one after another. For instance, the GBP/USD pair has risen significantly, breaking through key levels and having a notable increase from the daily low. The euro/dollar also showed an upward trend, reaching a certain high at its peak. The New Zealand dollar/US dollar and the Australian dollar/US dollar also rose significantly, while the US dollar/Canadian dollar declined. In the commodity market, the spot gold price was once supported by the weakening of the US dollar and showed signs of rising.
For investors, this change in the US dollar index undoubtedly brings new challenges and opportunities to investment decisions. In foreign exchange trading, investors need to closely monitor the exchange rate changes of the US dollar against other currencies and reasonably adjust their investment portfolios. In terms of commodity investment, the price trends of commodities denominated in US dollars such as gold may fluctuate due to the decline of the US dollar index. Investors need to be cautious in seizing the investment timing. In addition, the stock market may also be indirectly affected by the fluctuations of the US dollar index, especially those multinational enterprises that are sensitive to exchange rates, whose stock prices may face varying degrees of fluctuations due to the weakening of the US dollar.
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