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Fundamentals

During Thursday's (June 15th) Asian session, the USDX oscillated downward, and it is currently trading near $103.1. Since June, the USD is softening, descending from a high of $104.7 to a low of $102.7 in the past half month, with the Fed's hawkish resolution failing to save it. Before the resolution was released last night, the PPI data was less than expected, and the USDX dropped to near $102.7. Moreover, after the resolution was released, the forward strong hawkish signal suggests two more rate hikes (50 basis points) during the year. Then, the USDX rebounded just slightly, to near $103.4, or yesterday's high, and then gradually retracted gains, which confuses many investors. Recently, indicators show that U.S. economic activity continues to expand moderately, job market grows significantly in recent months and the unemployment rate remains low. Nonetheless, the inflation is still at a high level, there are factors that support a stronger USD, but the USDX is retracing, which indicates that the market predicts the situation correctly. Furthermore, trends don't end in a day, so as the retracements and rebounds. With the recent mixed data, investor shall trade the short-term and follow the main trend.

Data: U.S. May PPI annual rate is 1.1%, while the expected value is 1.5%, and the previous value was 2.3%.

Investors need to pay attention to the U.S. monthly retail sales rate and the U.S. monthly import price index for May, as well as the U.S. initial jobless claims for the week ending June 10th, all will be released tonight.

Technical Analysis

Regarding the daily chart, MACD extends the death cross and expands, forming a bearish trend. Today, the USD surged but failed to cross over yesterday's high and formed a long-upper-shadow, demonstrating a weak trend. Additionally, the USDX is suppressed by the 5-/10-/20- day SMAs with the short-term bearish momentum generating. If the USD fails to break above the resistance at $103.4 soon, it may plunge lower than $102.3 or even further to $100. Instead, if the USD recovers $103.4, the overhead resistance will be near $103.8 with further resistance at $104.8.

Today's trading plan: USD will be bearish today. With the recent slowdown of data, try to trade in the short-term for a rebound or a retracement according to the data, with the target of short. There may be horrible data released tonight, and investors should wait and see if the data supports the USD. If so, try to follow it and trade swiftly, or go short the USDX when it gets weaker after surging up. On the contrary, if the data is unfavorable, go short directly without any trades of rebound.

Trading Recommendations

Trading direction: Short

Entry price: 103.400

Target price: 102.300

Stop loss: 103.800

Support: 103.000/102.300

Resistance: 103.400/104.300