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29 May 2025,07:17

Daily Market Analysis

Dollar Index Rebounds as U.S. Consumer Confidence Surges

29 May 2025, 07:17

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 Key Takeaways:

*U.S. Consumer Confidence surged to 98.0 vs. expected 87.1.

*Durable Goods Orders better than forecast, supporting dollar sentiment.

*Longer-term risks tied to tariffs and budget spending cloud outlook.

The Dollar Index rebounded sharply on Tuesday, recovering recent losses after a string of stronger-than-expected U.S. economic data boosted investor sentiment. According to the Conference Board, U.S. Consumer Confidence jumped to 98.0 in May, up from a revised 85.7 in April and well above market expectations of 87.1. Meanwhile, Durable Goods Orders contracted by 6.3%—a sharper drop than the previous month—but still beat forecasts of a deeper 7.6% decline, easing concerns over a broader slowdown in manufacturing.

Despite this near-term strength, sentiment toward the greenback remains fragile in the longer term. Markets remain wary of renewed fiscal pressure stemming from President Donald Trump’s proposed global tariffs and ongoing debates surrounding new spending bills. Both factors could further strain the U.S. budget balance and weigh on the dollar over time. Traders are now closely monitoring developments in Washington for clues on the trajectory of debt and fiscal policy, which could have significant implications for dollar flows in the months ahead.

Technical Analysis

Dollar_Index, 4-Hour Chart: 

The Dollar Index is trading higher, having broken above its recent upward channel. This technical breakout suggests that bullish momentum may continue in the near term. MACD indicates growing bullish momentum, while the RSI stands at 61, holding above the midline. Should momentum persist, the next key resistance stands at 100.30, with a further upside target at 101.90. On the downside, support levels are seen at 98.90 and 98.00.

Resistance level: 100.30, 101.90

Support level: 98.90, 98.00

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