Brocker.Org: US Dollar preserves gains above 99


After failing to break above the 99 handle at the beginning of Draghi’s press conference, the US Dollar Index fell to 98.70 but was able to quickly recover as the investors started to digest the remarks regarding the ECB’s policy stance. The index surged back above 99 and refreshed its session high at 99.20. As of writing, the index was up 0.25%, at 99.10.

Draghi disappointed the markets as he didn’t give any hints regarding a possible timing of the next policy move. He said that the euro area’s recovery has been broad and strong but there were no reasons to discuss a QE exit strategy and he repeated that if seemed necessary, they could decide to extend the QE beyond 2018. 

On the other hand, macro data from the United States came in below expectations on Thursday. The weekly initial claims rose to 257K from 243K, missing the expectation of 241K, while the durable goods orders eased to 0.7% (vs. 1.2% exp.) in March from 2.3% in February. The weak data, coupled with the falling U.S. Treasury yields hurt the bullish momentum of the index in the last hour. 10-year T-bond yield is at %2.291, losing 0.9% on the day.

Technical outlook

The index is facing the first hurdle at 99.20 (daily high) ahead of 99.75 (Mar. 23 low) and 100 (psychological level). To the downside, another break below 99 (psychological level) could open the door towards 98.30 (Nov. 10 low) and 98 (psychological level).