US Dollar Index Technical Analysis: Outlook for the coming week

US Dollar Index Technical Analysis: Outlook for the coming week

According to a report from www.fxstreet.com, the US dollar is trading with small losses in a mixed market. Traders are at a loss as the Fed meets in two weeks. Although the US Dollar Index closed above key resistance, it fell back below it on Friday. After increased volatility earlier in the week, the US dollar is consolidating with lower highs and higher lows. Traders are hesitant as they have pushed their rate cut expectations to May instead of March, making it difficult for the dollar to rise significantly.

The University of Michigan released figures on consumer sentiment and inflation expectations. Despite a rise in sentiment to 78.8, this was overshadowed by a fall in inflation expectations from 2.9% to 2.8%. From the US Fed side, members such as Austin Goolsbee and Mary Daly appeared to initiate discussions about interest rates and inflation. Fresh US airstrikes against Houthi rebels and the Senate's vote on a preliminary funding bill also played a role.

According to CME Group's FedWatch Tool, there is a 97.4% bet that the Federal Reserve will leave interest rates unchanged at its January meeting.

The US dollar index shows an uncertain development, which is threatened by a possible bull catch. The impact on the market is difficult to predict as political, economic and social factors come into play. Uncertainty over ongoing Fed policy could continue to lead to a turbulent period for currencies and the financial market as a whole.

At the World Economic Forum in Davos, “restoring trust” will be discussed as the main theme, targeting geopolitical challenges, artificial intelligence, as well as climate change and energy security. As a financial professional, it is important to keep an eye on these international developments as they can impact the global economy.