The US Dollar concludes its most challenging week since July as investors place their bets on a Federal Reserve leaning towards a dovish stance.

• The DXY Index records a value of 103.90, experiencing a 0.40% loss and accumulating a 1.60% decline for the week.
• Investors are still processing the data released over the week.
• The combination of decreasing inflation and labor market indicators suggests the likelihood of the Fed refraining from further rate hikes.
• On Friday, the Fed’s Susan Collins was perceived as adopting a hawkish stance.

Closing the week, the US Dollar Index dipped to 103.90, marking a 1.60% weekly loss. The Greenback’s descent was primarily attributed to subdued inflation figures and weaker economic activity data in the US.

With the US economy showing inflationary concerns and a cooling labor market, markets appeared optimistic that the Federal Reserve (Fed) won’t pursue further hikes, leading to a week-long weakening of the US Dollar. The upcoming week will see the release of October’s Durable Goods figures and November’s S&P PMIs in the United States.

Daily market summary: US stands soft as investors assess the week’s data

Continuing its descent, the US Dollar Index moved towards 103.90.

Throughout the week, the Greenback experienced notable weakness following the release of subdued inflation figures and weaker economic activity data.

The US Bureau of Labor Statistics reported that October’s Core Consumer Price Index (CPI) fell short of expectations, registering 4% YoY instead of the anticipated 4.1%, marking a deceleration from the previous figure of 4.1%.

The main figure recorded a 3.2% year-over-year (YoY) rate, falling short of the consensus at 3.3% and compared to its previous reading of 3.7%.

Moreover, the Core Producer Price Index (PPI) for October failed to meet expectations, registering 2.4% year-over-year (YoY) instead of the anticipated 2.7% and decreasing from its previous reading of 2.7%.

Conversely, October’s Retail Sales surpassed expectations, showing a 0.1% month-over-month (MoM) decline instead of the anticipated 0.3% decrease.

Industrial Production in the United States fell below projections, marking a 0.6% month-over-month (MoM) decline, surpassing the anticipated -0.3%. Additionally, it recorded a year-over-year (YoY) decrease of 0.7%.

Friday’s report indicated that Housing Starts and Building Permits for October exceeded expectations.

Technical Analysis: US dollar bears reclaim the 100-day SMA, with further downside on the horizon

Analyzing the daily chart, the DXY maintains a bearish technical stance with sellers taking command, indicating the likelihood of additional downward momentum. The Relative Strength Index (RSI) is below its midline, indicating a bearish sentiment, and the Moving Average Convergence (MACD) histogram displays an increase in red bars.

From a broader perspective, the index is situated below both the 20-day and 100-day Simple Moving Averages (SMA), supporting a bearish outlook for the USD.

Support levels include 103.80, 103.60 (200-day SMA)

Resistance levels are at 104.15 (100-day SMA), 104.50, and 105.00.