Dollar Index: if it doesn’t rise, it falls
March 07, 2024 @ 10:49 +03:00
The Dollar Index lost a third of a per cent on Wednesday and is once again attempting to break below its 200-day moving average (MA). Perhaps the formula “if it doesn’t rise, it falls” can be applied to the dollar.
![](https://fxpro.news/wp-content/uploads/2024/03/dxy_daily_240306.png)
In early February, the dollar managed to consolidate above this line in a sharp move, but this did not put it on a growth path as one would expect. In November and December, signals that the next move would be a rate cut took almost 6% off the dollar. The dollar was only able to recover half of these losses as forecasts for the first cut were pushed back from March to June and from 6 to 3 cuts this year.
The dollar’s modest performance suggests impressive selling pressure despite the positive fundamental backdrop. The dynamics of the Dollar Index suggest a change in sentiment since the second half of February, with the DXY falling every trading session in March.
![](https://fxpro.news/wp-content/uploads/2024/03/eurusddaily_240306.png)
It may be too early for dollar bulls to celebrate a turning point in this protracted battle, as the US currency has been buying back on dips below its 200-day MA since the second half of January.
Meanwhile, the EURUSD and GBPUSD have already scored small victories, building gains above their 200-day MAs and consolidating above their 50-day averages in the early days of March.
![](https://fxpro.news/wp-content/uploads/2024/03/gbpusddaily_240306.png)
For the USD index, a break below 103.0 will be a significant signal to break the uptrend, opening a direct path to 102 and further to 100.50. For EURUSD, momentum in the 1.0960-1.1000 area and the ability to break above the December highs at 1.11 will be important. For GBPUSD, the focus will be on the 1.2750-1.2800 area.
The FxPro Analyst Team