US Dollar DXY Index: Bears Look In Control Above 106.00 Before Powell

• The index falls to daily lows near 106.30 on Wednesday.
• A new revision allowed GDP to grow by 2.9% year-on-year in the third quarter.
• President Powell will speak later in the American session.

The dollar, followed by the DXY index, remains defensive above 106.00 after the opening bell on Wednesday on Wall Street.

USD Index pays special attention to Powell

The index gives up part of the three-day advance as the space associated with risk improves and awaits the keynote speech from Chairman Powell, scheduled for later in the American session.

In addition, the resumption of downward pressure on the dollar is accompanied by another positive performance from US yields across the curve, which appear to have woken up and add to Tuesday’s gains.

In the US data realm, MBA mortgage applications contracted 0.8% in the week to November 25 and the ADP employment turnaround disappointed expectations after the US private sector added 127,000 jobs. job in November versus forecasts of 200,000. Other data included the widening of the trade deficit to 99,000 million dollars in October and another review of the GDP Growth Rate for the third quarter, in which the economy is expected to grow by 2.9% year-on-year. Finally, the Chicago PMI dipped to 37.2 in November, pending home sales contracted 4.6% m/m in October and JOLT job openings stood at 10.334 million in the same month. The Fed’s Beige Book will close the daily calendar later in the session.

Prior to Powell’s speech, FOMC Governor L.Cook will speak on “The Outlook for Monetary Policy and Observations on Economic Developments.”

What to keep in mind around the dollar

The dollar loses some of its recent luster and returns to the 106.30 area amid cautiousness ahead of leading indicator results and Fed Powell’s speech.

While the hawkish Fed speech keeps the Fed pivot narrative in the cold, upcoming US fundamentals results will likely play a key role in determining the chances of a higher pace. slowing of the Fed’s normalization process in the short term.

technical levels

Now, the index is back 0.34% to 106.47 and a break of 105.47 (200-day SMA) would open the door to 105.32 (weekly low Nov 28) and finally 104.63 (monthly low Aug 10). On the other hand, immediate resistance emerges at 107.99 (weekly high Nov. 21), followed by 109.11 (100-day SMA) and then 110.34 (55-day SMA).