US Dollar Index Overview; May 16, 2022

US Dollar Index Overview

The new week starts with rising U.S. dollar against major peers as DXY moves in rigid boundaries on Monday and consolidates around 104.55 mark. The key hurdles are seen at 104.40 to 104.65 mark. A sustained close of either side on H1 chart requires for the further directions.

On the given chart, DXY is merged with US 10Y Treasury Yield as rising yield leads to stronger U.S. dollar too. US 10Y also moves in narrow range on Monday.

The key affecting factors to the DXY are massive selloff in U.S. stocks, extreme panic sentiments in crypto markets and drastically declining gold prices. To control the rising inflation by major countries leads the U.S. dollar stronger and considered as Safe haven asset.

Currently Fed is also considering fast move to hike the interest rates, which leads to gold down. In other scenario, if Fed has selected slow interest rate hiking path, it may turn the gold bullish.

According to the latest research by MKS PAMP, there are two options for the precious metal — dropping to $1,300 an ounce or surging to $4,000 an ounce. But it all depends on how fast or slow the Fed tightens.

Let’s keep an eye open for all the statements given by Fed officials to examine the further strategies Fed to of control the rising Inflations.

Take a look and do trade wisely!
Good Luck