US dollar: outlook for April 24-28

The US dollar continued its decline during the past week. Treasury Secretary Steven Mnuchin said that tax reform will unlikely happen by August. This statement has definitely depraved the American currency from its important bullish driver. At the same time, Mnuchin rejected the idea that Donald Trump was trying to talk down the strength of the US dollar. Still, the US doesn’t have substantial drivers at this point.

In the coming days, we’ll hear from the Fed’s member Kashkari on Monday. CB consumer confidence is due on Tuesday, while core durable goods orders and unemployment claims are awaited on Thursday. On Friday America will release the first estimate of Q1 GDP. One probably shouldn’t expect strong growth figures after the disappointing data on retail sales and consumer prices in March. In addition, Donald Trump said that the Congress will once again vote on repealing Obamacare, although no exact information about the vote is available. US lawmakers will also have until Friday to reach a compromise on new legislation to keep the government funded.

The US dollar index descended to 99.30 after recoiling down from the resistance line around 101.40 in the previous week. After the initial decline, the currency managed to apply the brake and settle above this level. There’s a scope for more downside, but the greenback should find support at 99,00 (200-day MA) and 98.40 (support of the wedge). On the upside, the obstacles lie at 100.65 (50-day MA) and 101.00 (100-day MA). The moving averages are horizontal, so it seems that the pair doesn’t have momentum to leave the wedge yet.

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Elizabeth Belugina