Mighty Dollar Turns Its Gaze To Data Barrage
XM Group | Jun 23, 2021 08:10AM ET
Dollar comes back swinging
The Fed sent shock waves through financial markets lately after it signalled that a decision to wind down the enormous asset purchase program is imminent. Policymakers have stressed that this process will be slow, but they want to get the ball rolling, fearful of overheating the economy and being forced to slam on the brakes even harder later.
The US economy is strong thanks to the tremendous spending packages, with inflation running hot and consumption booming. The only dark spot is the labor market, which is still far from a full recovery. That said, the Fed thinks it's only a matter of time. The economy is overflowing with open jobs and when the generous unemployment benefits expire in September, a flood of workers could return.
Taking a technical look at euro/dollar, initial support to further declines may come from the 1.1845 zone, a break of which would turn the focus towards the 1.1700 region.
On the upside, the first barrier for buyers might be the 1.1990 area, which also encompasses the 200-day moving average. Moving higher, the inside swing low of 1.2050 could provide resistance.
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