The U.S. Dollar Index ® (USDX) surged to reach a fresh 2023 high at 107.05 during early October trading driven by the increased demand for the U.S. Dollar. Subsequently, the USDX retraced from the high to close the month at 106.49, with a gain of 0.58%, marking the third consecutive monthly increase.
Insights provided by
U.S. Dollar Index® Focus
High impact events per day
|8||Fed’s Chair Powell Speech|
|10||Michigan Consumer Sentiment Index|
|14||Consumer Price Index|
|15||Producer Price Index & Retail Sales|
|24||S&P Global Manufacturing & Services PMI PREL|
|29||Gross Domestic Product Annualized Q3 PREL|
|30||Core Personal Consumption Expenditures - Price Index|
Weighting: EUR 57.6% / JPY 13.6% / GBP 11.9% / CAD 9.1% / SEK 4.2% & CHF 3.6% | Source: TradingView | Conditions Table: using daily SMA (10, 20, 30,50, 100, 200), EMA (10, 20, 30,50, 100, 200), Ichimoku Cloud (9, 26, 52), VWMA (20), HullMA (9), RSI (14), Stochastic (14, 3, 3), CCI (20), ADX (14, 14), Awesome Oscillator, Momentum (10), MACD (12, 26, 9), Stochastic RSI (3, 3, 14, 14), Williams %R (14), Bulls and Bears Power and Ultimate Oscillator (7,14,28) | Support & Resistance Levels: using AutoUFOs® (0.5) applied to a daily timeframe (plotted as dotted lines that represent relevant support and resistance price zones colored as follows: red = resistance levels & green = support levels)
The first day of October saw a strong start to trading as the U.S. Dollar Index ® rallied to pierce the upper boundary of the daily Bollinger Bands, driven by the ongoing rise in demand for the U.S. Dollar. This rally came as the U.S. government averted a shutdown, and economic data suggested that the Federal Reserve was likely to maintain higher interest rates for an extended period. The U.S. Dollar Index ® closed the first day of trading at 106.61 with a gain of 0.69%, the strongest daily performance of the week. On October 3rd the U.S. Dollar Index ® reached a new high for 2023, at 107.05, the highest in 11 months before reversing. On October 4th, the downward momentum was exacerbated after the announcement of ADP Employment change, which reported the addition of 89,000 new private sector jobs, a considerable shortfall compared to expectations and the prior month's figures. The U.S. Dollar Index ® closed down 0.26% marking the start of a three-day losing streak despite the release of Nonfarm Payrolls data for September on October 6th. The data surpassed expectations with 297,000 new jobs (revised from 336,000 initially reported) against the 170,000 anticipated. However, this did not entice the bulls. The U.S. Dollar Index ® closed the first week of trading at 105.78 with a loss of 0.09%.
The bearish momentum continued into the following week until the U.S. Dollar Index ® found demand at a support area 105.47 - 104.96 on October 10th. The level held and the U.S. Dollar Index ® closed at 105.56, the first close below the midpoint of the daily Bollinger Bands since July. The U.S. Dollar Index ® traded deeper into the area the following day although lifted slightly after the FOMC minutes were released to close at 105.57. The bulls returned on October 12th after September's inflation data was announced. Core Inflation (all items less food and energy) eased as expected for the period 12-month ending September to 4.1% from 4.3% the prior month, the lowest rate since September 2021. The Consumer Price Index, however, surprised the markets as the pace of annual inflation (CPI for all items) remained steady at 3.7% for the same 12-month period, a slightly higher rate than anticipated. The U.S. Dollar Index ® closed at 106.37 with a gain of 0.87%, the strongest one-day performance of the month. This rally extended into Friday's trading, with the U.S. Dollar bulls unphased by the Michigan Consumer Sentiment Index data falling short of expectations. The U.S. Dollar Index ® closed the week at 106.43 with a gain of 0.40%.
On Monday October 16th the U.S. Dollar Index ® traded lower as the demand for the U.S Dollar weakened, to close the day with a loss of 0.35%. The market bounced back on October 17th after Retail Sales data announced better than expected figures enticing the U.S. Dollar bulls back, although this was short lived as the bearish sentiment returned. The U.S. Dollar Index® found support at the daily 20 EMA, prompting a bounce that resulted in a neutral close for the day with 0.01% gain. The U.S. Dollar Index ® subsequently traded sideways throughout the remainder of the week with the daily 20 EMA acting as support and the prior Fridays high creating some resistance. The U.S. Dollar Index ® closed the week at 105.99 with a loss of 0.39%.
On Monday October 23rd the U.S. Dollar Index ® broke the trading range and traded below the daily 20 EMA to close the day resting on the lower boundary of the daily Bollinger Bands, the first time since mid-July with a loss of 0.61%, the largest one-day loss of the month. On October 24th the U.S. Dollar Index ® bounced back after finding support from the lower Bollinger Band and receiving a boost from positive S&P Global Manufacturing and Services PMI data. Manufacturing PMI data was confirmed at 50.0, marking an improvement on the prior months data and exceeding expectations. The Services PMI data defied the recent declining trend to exceed the prior month’s release and expectations. The U.S. Dollar Index ® closed the day 106.08 with a gain of 0.65%. The bullish momentum continued into the following day and the market traded through the midpoint of the daily Bollinger Bands. However, it met resistance at the upper boundary on October 26th after strong demand pushed the U.S. Dollar higher following the announcement of GDP Q3 preliminary figures, which indicated an annualized growth rate of 4.9% for the U.S. economy, beating expectations and outperforming the confirmed Q2 growth. On October 27th the bears drove the U.S. Dollar Index ® lower until support was found at the midpoint of the daily Bollinger Bands. U.S. Dollar Index ® closed neutral, with a small loss of 0.04%. The U.S. Dollar Index ® closed the week with a gain of 0.37%.
In the final two trading days of the month, bearish sentiment returned on October 30th and the market closed with a loss of 0.42%. However, on 31st October support was found at the lower boundary of the daily Bollinger Bands and demand returned. The U.S. Dollar Index ® rallied to recapture all the prior day's losses to close with a 0.47% gain.
The U.S. Dollar Index ® closed the month at 106.49 with a gain of 0.58%.
The U.S. Dollar Index ® is in a sideways trend on the daily timeframe using the daily SMA (10 and 20) and daily EMA (10 and 20). The U.S. Dollar Index ® was in an uptrend on the weekly timeframe based on the weekly SMA (20, 30 and 50) and weekly EMA (20, 30 and 50).
Source: ICE Connect
|Spot Rates||Ticker||2-Oct-23||31-Oct-23||Monthly Change|
|US Dollar Index||DX A0||106.904||106.663||-0.226%|
|Front Month||Ticker||2-Oct-23||29-Sep-23||Monthly Change|
|Other Contracts||Ticker||2-Oct-23||31-Oct-23||Monthly Change|
|Mini Brent Crude||BM-ICS||90.71||87.41||-3.775%|
|MSCI World Index||MWL||2860.1||2788||-2.586%|
|MSCI Emerging Markets Index||MME||950.4||919.2||-3.394%|
|Mini US Dollar/Offshore Renminbi||CHM-ICS||7.2981||7.3263||-0.385%|
Source: ICE Connect
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