US Dollar declines modestly ahead of US GDP and PCE data.

• Strong consumer confidence and housing sector data did not trigger moves in the USD.
• The next highlight will be the Fed's Beige Book report on Wednesday, where markets will get a clearer perspective on the health of the US economy.
• PCE and GDP revisions are the highlights of the week.

The US Dollar Index (DXY) is slowly declining as US markets prepare for the release of economic data this week. On Tuesday, the US reported strong confidence and housing data, but the USD remains weak ahead of high-level data due later in the week.

Despite some slight losses and markets continuing to abandon hopes of an interest rate cut in June or July, the resilient US economy allows the Fed to maintain its cautious stance, cushioning the US dollar. Thursday's Gross Domestic Product (GDP) and Personal Consumption Expenditure (PCE) will set the pace of bets on the next decisions of the Federal Reserve (Fed). Current odds predict a first cut in September.

Daily Market Moves: DXY Sees Modest Losses Despite Strong Data, Focus Remains on Fed

• The Conference Board's consumer confidence came in higher than expected at 102, compared to the 96 anticipated.
• Additionally, the S&P/Case-Shiller Home Price Index beat expectations at 7.4% year-over-year in March.
• April Personal Consumption Expenditure (PCE), the Fed's preferred inflation indicator, is expected to remain at 2.7% year-over-year for headline inflation and 2.8% for core inflation. First quarter GDP is expected to be revised upwards.
• The outcome of this data will continue to shape expectations about the easing cycle, dictating the pace of the USD.

DXY Technical Analysis: US Dollar Sees Sustained Selling Pressure and Bearish Command

The daily chart indicators continue to show steadily increasing bearish momentum on the DXY. The RSI maintains a negative slope and remains in a selling zone, indicating prevailing selling pressure. This is even more evident with the moving average convergence/divergence (MACD) indicator red bars showing bearish momentum.

In terms of SMAs, even though the DXY is trading below the 20-day SMA and showing the short-term efficiency of the bears, it continues to remain above the 100-day and 200-day SMA, suggesting that the bulls They have relative strength over a longer term.