- The American dollar index recovers some lost land and is approaching 103.50 in the early European session on Thursday.
- The DXY maintains the negative perspective below the 100 -day EMA with a bearish RSI indicator.
- The first downward objective to be monitored is 103.20; The immediate upward barrier is located at 104.10.
The American dollar index (DXY), an index of the value of the US dollar (USD) measured in front of a basket of six world currencies, quotes in positive territory about 103.50 during the early European session on Thursday.
However, DXY’s bullish potential could be limited since the Federal Reserve (FED) indicated that it is likely that cuts in interest rates will be produced later this year. In addition, the FED officials reduced their prognosis of economic growth and reviewed both their inflation projection and their unemployment estimates.
According to the daily chart, the DXY bassist perspective remains intact, with the index holding below the exponential mobile (EMA) average of 100 days. A greater decrease seems favorable since the 14 -day relative force (RSI) index is below the midline about 31.75.
The initial support level for the USD index is 103.20, the minimum of March 18. A sustained trade below the mentioned level could expose 101.88, the lower limit of the Bollinger band. A rupture of this level could see a fall at 100.53, the minimum of August 28, 2024.
On the other hand, the maximum of March 14 in 104.10 acts as an immediate resistance level for the DXY. The additional filter to monitor is 105.45, the maximum of November 6, 2024. The rise key barrier is 106.00, representing the 100 -day Ema and the psychological level.
DAILY DOLL OF THE DOLL OF THE DOLL INDEX (DXY)
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values ​​that overcome in new purchases. It is usually positive for the US dollar.
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.