Friday witnessed a substantial surge on Wall Street, as evidenced by the Nasdaq Composite, which attained its most significant single-day percentage increase since May 26. Increasing skepticism regarding the probability that the Federal Reserve would enforce another interest rate hike contributed to this surge.
During the week, the blue-chip index Dow Jones Industrial Average experienced an approximate 0.7% increase, while the benchmark S&P 500 gained 1.3% and the Nasdaq displayed a significant surge of 2.4%.
US Dollar Index (USDX) Awaits Crucial Events
The upcoming week is expected to be eventful as investors speculate on the rate cut by the Fed. Moreover, investors will continue to assess whether the Fed is nearing the conclusion of its rate increases to curb inflation.
Tuesday's release of the US inflation report for October assumes a prominent position on the economic schedule. The report forecasts a downshift in the headline number from 3.7% in September to 3.3%. Further information regarding producer prices and revised retail sales figures will enhance the overall comprehension of the inflationary environment.
US Dollar Index (USDX) Technical Analysis
The US Dollar Index (USDX) showed extensive volatility in recent weeks, whereas the latest daily chart shows bearish pressure from the dynamic 20 EMA. Moreover, the selling pressure is supported by a lower low formation at the 104.81 level before forming a minor bullish correction.
Moreover, the extensive bullish trend from the 99.57 low formed a valid top at the 107.32 level from where the recent downside pressure came. As the current price trades at the premium zone of the existing bullish swing, any bearish opportunity could work well, where the main aim would be to test the 102.93 support level.
On the bullish side, investors should closely monitor how the CPI and Retail Sales come. A higher CPI could work as a bullish factor for DXY bulls. In that case, investors might expect the price to reach the 109.44 level. In that case, a bullish rejection with a daily close above the dynamic 20 EMA could be a strong bullish opportunity for the US Dollar (DXY).
