Dollar advances on fresh expectations for prolonged tightening cycle
The US dollar index keeps firm tone on Monday and extends strong rally from past two days, after upbeat US labor and services sector data fueled expectations for a hawkish shift in Fed rate outlook.
Markets speculate that the US central bank would go for another two 0.25% hikes in current circumstances, which also reduce the possibility of cutting rates before the end of the year.
Fresh advance on Monday hit the highest in almost one month and generated bullish signal on break above daily Kijun-sen (103.03), which looks for verification on daily close above this level.
Bulls eye falling 55DMA (103.80) violation of which would open way for test of the base of thick daily cloud (104.46).
Bullish daily techs support the action, but overbought conditions warn that bulls may pause for consolidation / correction in coming sessions.
Res: 102.73; 103.04; 103.80; 104.46
Sup: 103.03; 102.64; 102.47; 101.96