Today, on May 28th, the US Dollar keep on gaining value against other major currencies. The USD index is currently up by 0,08%. This became possible due to strong economic data from the USA, including durable goods orders and consumer confidence.
The index is showing the strength of the US Dollar against a basket of 6 other major currencies, with the Euro being the major one – contributing to more than 50% of the index. Yesterday, the local high set another local high at 80,47, thereby trading 80,45.
American Economy Recovers
As we have just mentioned, the index grew from 80,17 up to 80,47 after positive economic reports. The US department of Trade published a report on durable goods orders, which indicated a 0,8% increase as compared to the previous repotting period. The readings exceeded analyst expectations (0,7%).
Later on, Conference Board released a report on the US consumer confidence index. The data went up from 81,7 in April to 83 in May, The figures matched expectations.
The common European currency declined amid such strong figures and the expectations that the ECB may raise short-term interest rates.
As for US stock indices, they also gained some strength amid positive economic reports. S&P 500 increased by 0,6%, thereby setting a new high at 1 911,91 for the 12th time this year.
Dow Jones gained 0,4% to hit 16 675,50. Nasdaq increased by 1,2% up to 4 237,07. Apparently, the US stock market is getting rid of the fears that the US economy recovery is in jeopardy.
At the same time, the H4 chart of gold shows a decline after touching the bottom of the consolidation range close to 1 279,70. The touch was followed by sharp downswing to 1 268,20.
Today's sharp decline in the 10-year US bond yield during the Asian trading session may end up with helping the US Dollar to go further up against other majors.
Masterforex-V Academy On USD Index Prospects
According to the comprehensive analysis of the USD index (H4) conducted by the trading experts of Masterforex-V Academy, the price touched the reversal point represented by pivot MF at 80,48. We can see a bearish tendency unfolding since April 4th from the local high of 80,62. The tendency was completed on May 8th after setting another local low at 78,91. The index has been rallying since then. The strengthening is taking place above the MF sloping channel (marked blue), which means the demand for the American currency is still strong.
While the price is above the sloping channel, the bullish tendency holds true, which means that a further rally is more probable than a bearish reaction. A break and consolidation above the local high (80,48) will confirm the strenght of the current bullish tendency, thereby giving way to 80,62 and maybe higher.
At the same time, a decline down to 80,17 followed by a break below the sloping channel line will question the rally. On break and consolidating below 80,17, the price may well drop down to 80,05 and 79,88.
