empty
27.10.2023 02:40 PM
USD Forecast: strong US data underscores economy's resilience

This image is no longer relevant

Today marks the end of the last full trading week of October. The dollar continues to dominate in the market, while major global stock indices, including US ones, keep losing value. In the equity market, the dollar as a safe-haven asset is also in demand amid global geopolitical tensions.

After Tuesday's release of the PMI indices, Thursday's macroeconomic figures once again confirmed the strength of the US economy. Data showed that gross domestic product in the United States grew by 4.9% in the third quarter, marking the highest pace since the end of 2021. The reading followed the previous quarterly rise of 2.1% and surpassed a forecast of 4.2%. The GDP price index, measuring the changes in prices for all of the goods and services produced in an economy, rose to 3.5% in the third quarter, up from a 1.7% increase in the second quarter and above a consensus estimate of 2.5%. This indirectly indicated that inflation accelerated.

Statistics suggest that despite high interest rates, the US economy is coping well, and inflation remains elevated. This has sparked talks that the Federal Reserve might consider cutting interest rates instead of raising them further.

Economists believe that the resilience of the American economy and its relatively high growth rate paves the way for increased investor interest in US assets and government bonds. This in turn is likely to lead to lower yields and a weaker dollar.

Today, market participants will be closely watching the release of the US personal consumption expenditures (PCE) price indices. The core figure is expected to climb to 0.3% month on month, up from the 0.1% rate recorded in August. On an annual basis, the PCE price index is forecast to rise by 3.7% in September, slightly down from a gain of 3.9% recorded in August. If data exceeds forecasts, the US dollar will most likely advance. Besides, traders are awaiting the University of Michigan's final consumer confidence index. The figure is anticipated to remain at 63.0. Thus, its release will hardly trigger a significant investor response.

This image is no longer relevant

From a technical point of view, the US dollar index (#USDX) is trading upwards. In the medium term, the index is above the key level of 104.10 (EMA200 on the daily chart). In the long term, it is above the crucial support levels of 101.40 (EMA144 on the weekly chart), 100.30 (EMA200 on the weekly chart), and 100.00.

Thus, long positions remain a priority. Local resistance levels at 107.00, 107.32, 107.80, and 108.00 can be seen as immediate growth targets.

Support Levels: 106.32, 106.15, 106.00, 105.80, 105.40, 105.00, 104.10, 103.00, 102.00, 101.40, 101.00, 100.30, 100.00 Resistance Levels: 106.75, 107.00, 107.32, 107.80, 108.00, 109.00, 109.25.

Jurij Tolin,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

The Euro Is Rushing Things

After a rapid rally from February through April, EUR/USD entered a prolonged consolidation phase. For several weeks now, the major currency pair has remained locked within the 1.1100–1.1400 trading range

Marek Petkovich 18:43 2025-05-28 UTC+2

USD/CAD. Analysis and Forecast

The USD/CAD pair has been recovering for the third consecutive day from this year's lowest level, supported by renewed buying interest in the U.S. dollar. Yesterday's optimistic U.S. economic data

Irina Yanina 11:44 2025-05-28 UTC+2

DXY: U.S. Dollar Index Continues to Show Positive Momentum for the Second Day in a Row

On Wednesday, the U.S. Dollar Index (DXY) continued its upward momentum for the second consecutive day, rebounding from the monthly low reached earlier this week. The index rose

Irina Yanina 11:36 2025-05-28 UTC+2

Why Are Currencies Traded Against the Dollar Not Declining? (There Is a Chance EUR/USD May Resume Growth and USD/JPY May Fall)

We are truly living in an unusual time, where the classic principles of assessing market situations are being cast aside in favor of more pressing and, more importantly, unclear

Pati Gani 10:05 2025-05-28 UTC+2

Market Conditions Favor the Dollar

Yesterday, the U.S. dollar continued to strengthen against a number of risk assets—particularly gaining ground against the euro and the British pound. Strong U.S. economic data triggered significant movements

Jakub Novak 09:53 2025-05-28 UTC+2

The Market Has Left the Bad Behind

History repeats itself. Markets breathed a sigh of relief and bought the decline in the S&P 500 after Donald Trump's threats of 50% tariffs on the European Union were replaced

Marek Petkovich 09:47 2025-05-28 UTC+2

AUD/NZD. Analysis and Forecast

The AUD/NZD pair attempted to attract buyers on the decline, but so far, there hasn't been enough conviction to support a sustained move. Intraday upward momentum slowed following the Reserve

Irina Yanina 09:33 2025-05-28 UTC+2

GBP/USD Overview – May 28: What Is Trump's Plan This Time? Part 2

The GBP/USD currency pair also traded with a minimal decline. There was little news on the day, so the market decided to take a breather before the next upward move

Paolo Greco 08:00 2025-05-28 UTC+2

EUR/USD Overview – May 28: What Is Trump's Plan This Time?

On Tuesday, the EUR/USD currency pair showed a slight decline. The U.S. dollar continues to struggle to gain strength as market participants lack confidence in it. While it was previously

Paolo Greco 08:00 2025-05-28 UTC+2

What to Pay Attention to on May 28? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic reports are scheduled for Wednesday. Among the more or less noteworthy reports, only Germany's unemployment rate and the change in the number of unemployed can be highlighted

Paolo Greco 06:53 2025-05-28 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.