What Went Wrong For The Dollar?
Today’s Spotlight Market
The US Dollar Index continues to suffer setbacks on softer US economic data and technical selling.? The Index is now well over 600 points off recent highs and dropping.?? Many traders saw the decline coming, but even they are surprised at the speed and size of the drop.? Does this mean that the drop was excessive and the greenback is bound to bounce back?? That remains to be seen.
Fundamentals
Last Friday?s non-farm payroll data showed the US economy adding 223,000 jobs in the month of April. This was a good showing after a disappointing March.? However, this is simply a silver lining to an otherwise cloudy economic climate.? Retail sales were flat, which is making many market observers think that stock valuations could be too high.? Janet Yellen did spook the market a bit by voicing similar sentiment.? The flat PPI figures suggest the Fed may be in no rush to raise interest rates anytime soon.? The combination of disappointing US economic data and the stronger European data could inhibit a turnaround in the US Dollar.
Technical Notes? -? View Today’s Chart
Turning to the chart, we see the June Dollar Index completing a double-top formation, suggesting an end to the uptrend that had lasted 9 months.? The next support level for the Dollar Index could come in just below the 0.9000 level.? Prices may be able to gain some upward traction if the June contract can manage a close above the 0.9650 level.? The RSI remains in oversold levels, which could be somewhat supportive in the near-term.
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