The dollar index remains about 100.00 while tax risks limit the rise despite the good PMI data

• The DXY recovers from a minimum of two weeks after bouncing in the key support of 99.50.
• Fiscal concerns in the US grow after the approval of Trump’s tax bill by the Chamber, and Moody’s’s credit reduction adds pressure.
• The Global S&P PMI exceeds expectations, pointing out a stronger business activity in May
• Technical resistance is observed in the 21 -day EMA (100.40).

The US dollar index (DXY), which tracks the US dollar (USD) compared to a basket of six main currencies, is being negotiated cautiously around the 100.00 mark on Thursday after recovering from a minimum of two weeks and bouncing in the key support of the psychological level of 99.50 in the first hour of the day. While the dollar shows signs of resilience, the bullish potential remains limited since the feeling of broader risk remains fragile amid the growing fiscal uncertainty in the United States (USA).

The US Chamber of Representatives approved little by the fiscal bill of President Donald Trump by a single vote, intensifying fears of the country’s growing debt burden. It is projected that the bill will increase the federal deficit by almost 3 billion dollars during the next decade, and now awaits a vote in the Senate that is expected for August.

Adding pressure, Moody’s reduced the US credit rating to AA1, citing unsustainable debt levels and a lack of fiscal discipline. Meanwhile, stagnant trade negotiations are weighing on investor’s confidence, feeding a feeling of risk aversion that has maintained the profits of the US dollar under control.

However, the economic data published on Thursday offered a support ray. Business activity in the US accelerated in May, with the Global S&P Flash Flash Flash Manager Index (PMI) rising to 52.1 from 50.6 in April, while the manufacturing PMI jumped to 52.3 from 50.2, and the PMI of services also increased to 52.3 from 50.8, both overcoming the expectations and highlighting the resilience in resilience in resilience in resilience in resilience in resilience in resilience in resilience in resilience in resilience in The private sector despite the winds against policies.

From a technical perspective, the dollar index remains in a corrective phase within a broader bearish trend that began in March. The DXY is consolidating just below the 21 -day exponential (EMA) mobile average in 100.40. A sustained breakdown above this area would open the door to the level of 101.30–101.50, an old support converted into resistance.

The Momentum indicators have a mixed image with the relative force index (RSI) around 45.79, showing indecision with a lack of bullish momentum, while the convergence/divergence of mobile socks (MACD) is trying to an upward crossing. However, it remains below the zero line, a sign that the bullish conviction is still insufficient.

At the bottom, 99.50 is still a critical floor. A break below would probably attract more sales, potentially dragging the index towards the region of 98.80–99.00.