Dollar weakens on expected economic contraction
The US dollar has weakened considerably while the euro is strengthening after the release of the Purchasing Managers' Index (PMI) which showed improvement in the Eurozone.
The PMI index for both manufacturing and services in the EU was 54.4 in April, the highest in 11 months, up from 53.7 in March according to the report from IHS Markit.
The PMI index above 50 indicates that the business activity of the EU is expanding and the numbers are higher than Reuters' poll expectation that the PMI index would remain unchanged.
The increase in the PMI index was driven by a rise in hiring and new orders while business confidence also improved.
The preliminary PMI for manufacturing was 50.4 the highest in six months up from 49.2 in March and the preliminary PMI for services was 53.7, the highest in 12 months up from 52.6 in March.
The decline in the US dollar is due to concerns that the US economy is entering a severe slowdown which has affected the dollar index in late last year after it reached a 20-year high at the end of the previous year.
The Federal Reserve is expected to raise interest rates by another 0.25% at their policy meeting next week as inflation has proved to be more persistent than previously thought. Amid growing expectations that the central bank will begin to ease its monetary policy this year data on first-quarter GDP is set to be announced on Thursday, with forecasts suggesting a slowdown from the previous quarter.
Meanwhile, the PCE price index which is the Fed's preferred inflation measure will be released this week and is expected to show that inflation remains stubbornly high through March.
In the eurozone, first-quarter GDP data is also due out on Friday and is expected to show a slight uptick in growth while reports on April inflation from the region's largest economies, Germany, France and Spain suggest that inflation pressures remain elevated.
Technical analysis data (5H)
Resistance: 0.9116, 0.9123, 0.9133
Support: 0.9098, 0.9089, 0.9081
Source: Investing.comPivot Points April 24, 2023 06:08 PM GMT+7
| Name | S3 | S2 | S1 | Pivot Points | R1 | R2 | R3 |
| Classic | 0.9081 | 0.9089 | 0.9098 | 0.9106 | 0.9116 | 0.9123 | 0.9133 |
| Fibonacci | 0.9089 | 0.9095 | 0.9099 | 0.9106 | 0.9113 | 0.9117 | 0.9123 |
| Camarilla | 0.9104 | 0.9106 | 0.9107 | 0.9106 | 0.9111 | 0.9112 | 0.9114 |
| Woodie's | 0.9083 | 0.9090 | 0.9100 | 0.9107 | 0.9118 | 0.9124 | 0.9135 |
| DeMark's | - | - | 0.9102 | 0.9108 | 0.9120 | - | - |
Buy/Long 1: If there is a touch of support levels in the price range of 0.9089 - 0.9098 but unable to break the support level at 0.9098, consider setting TP at around 0.9123 and SL at around 0.9081 or according to the acceptable risk level.
Buy/Long 2: If it is possible to break the resistance levels in the price range of 0.9116 - 0.9123, consider setting TP at around 0.9133 and SL at around 0.9089 or according to the acceptable risk level.
Sell/Short 1: If there is a touch of resistance levels in the price range of 0.9116 - 0.9123 but unable to break the resistance level at 0.9116, consider setting TP at around 0.9089 and SL at around 0.9133 or according to the acceptable risk level.
Sell/Short 2: If it is possible to break the support levels in the price range of 0.9089 - 0.9098, consider setting TP at around 0.9081 and SL at around 0.9123 or according to the acceptable risk level.
Technical Indicators April 24, 2023 06:08 PM GMT+7
| Name | Value | Action |
| RSI(14) | 39.457 | Sell |
| STOCH(9,6) | 35.013 | Sell |
| STOCHRSI(14) | 0.000 | Oversold |
| MACD(12,26) | -0.001 | Sell |
| ADX(14) | 18.247 | Neutral |
| Williams %R | -89.041 | Oversold |
| CCI(14) | -163.4675 | Sell |
| ATR(14) | 0.0023 | Less Volatility |
| Highs/Lows(14) | -0.0021 | Sell |
| Ultimate Oscillator | 29.712 | Oversold |
| ROC | -0.504 | Sell |
| Bull/Bear Power(13) | -0.0028 | Sell |
|
Buy:0 Sell:7 Neutral:1 Summary:Strong Sell |
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