The US Dollar Index got a notable push since the middle of last week on the back of some positive economic releases.
However, the biggest push came in from the US 2nd GDP estimate, which showed a revision to the upside towards 1.2% instead of the initial reading of 0.7%.
Such reading brings back the possibility of another 25bps rate hike by the Federal Reserve during its upcoming meeting in June.
Despite that, there are still many economic figures which will be released over the coming days, and that should give us more clues on such possibility.
Short-Term Retracement?
Looking at the daily chart, the US Dollar index has been rising for the past three days, in addition to today’s earlier spike across the board.
The index is now trading well above its 96.80 support area and continued its rally all the way up to 97.80 until this report is released.
The Index has been declining since the beginning of the year, with gradual pace, the current upside retracement is still considered as a short-term retracement to the upside before the downside trend resumes.
The technical indicators are also supporting the idea of such retracement, both indicators are heavily oversold and crossed over to the upside, which increases the chances for another spike higher ahead.
Read more: https://www.orbex.com/blog/2017/05/usd-index-retracement-ahead/