The trading idea for the dollar index (DXY) dated August 25, 2022
On Thursday, the dollar index holds positions in the area of multi-year highs, gaining a foothold above the resistance of 108.0. In the Asian session, the initiative passed to the sellers of DXY, who were able to push the index to the level of 108.10.
The weak statistics of the United States put pressure on the asset. In the housing market in July, sales decreased by 12.6%. Preliminary business activity indices for August from S&P Global declined. In the manufacturing sector from 52.2 to 51.3 pp, in the service sector from 47.3 to 44.1 pp. Data on orders for long-term consumer goods remained at the level of last month with a growth forecast of 0.6%.
The economic symposium in Jackson Hole started today.. Experts pay special attention to Jerome Powell's speech, which will take place tomorrow, Friday, August 26.
According to analysts, the chances of an increase in the FOMC rate by 50 and 75 basis points in September are approximately equal. Now the rate is at the level of 2.5% and the next act of monetary restriction will send it to the maximum of 2008, despite a slight decline in the consumer price index last month.
Wells Fargo predicts a strengthening of the dollar by the end of this year. The dollar index remains the leader among other forex currency indices and the nearest target for it is called 110.00, which fully coincides with our vision of the market.
Taking into account the fundamental background and a slight corrective decline in the index, we propose to place an order to buy DXY
Buy-limit 107.80 take-profit 110.00 stop-loss 107.10