US dollar bulls attempt to take on H4 resistance
16.05.2022, 00:43

US dollar bulls attempt to take on H4 resistance

  • US dollar under pressure but battles back into the open.
  • Bulls meeting resistance on the 4-hour time frame.

The FX space has undergone appreciable moves of late and the US dollar moved into the 105 figure on Thursday only to be met with offers on Friday. 

The dollar came under pressure due to a rally in equities that had contributed to a risk-on mood but was still set for a sixth straight week of gains due to ebbing global growth and worries over higher rates. Stagflation is on the lips of economic observers' although readings have recently started to show some signs of relief with regard to inflation pressures. 

In that regard, Federal Reserve officials will continue to provide remarks in the upcoming week on the heels of a strong Consumer Price Inflation report, which although was missing the mark vs. expectations, the data has cemented the urgency to move quickly to a more neutral policy stance.

Most key will be Chair Jerome Powell's participation at a WSJ Q&A. NY Fed's John Williams remarks are also likely to grab the spotlight. "Any chatter about the possibility of MBS sales would also garner attention," analysts at TD Securities said.

Then, for data, the analysts explained that they look for Retail Sales to advance firmly in April (1.5%), continuing with the monthly gains registered so far this year. "Spending was likely aided by a strong rebound in auto purchases and an increase in control group sales. We also look for a 1%+ MoM gain in the eating/drinking segment (i.e. bars & restaurants) as consumers continue to transition away from goods spending."

DXY H4 chart

 

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