After Reaching a 20-year High in June, the US Dollar Index Falls

After reaching a 20-year high versus a basket of major currencies earlier in the session, the U.S. Dollar is now inching lower late Friday afternoon. Price movement is driven by concerns about a worldwide recession and predictions that the Federal Reserve will tighten monetary policy more quickly than its peers to combat excessive inflation.

Futures on the U.S. Dollar Index for June are trading at 103.690, down 0.112, or -0.11 percent, as of 20:00 GMT. The Invesco DB US Dollar Index Bullish Fund ETF (UUP) ended the trading session at $27.71, up $0.05, or +0.18 percent.

Late in the session, the U.S. Dollar is 0.07 percent weaker against the Euro. The British Pound is inching down after falling below $1.2300 for the first time in over two years, a day after the Bank of England issued a stern warning that Britain faces the double whammy of a recession and inflation exceeding 10 percent. The BoE also followed the Fed in boosting interest rates, increasing them by a quarter-point to 1 percent.

Technical Analysis of Daily Swing Chart

The daily swing chart indicates that the primary trend is upward. A breach of the intraday peak at 104.105 will indicate a resumption of the uptrend. A breach of 102.375 will reverse the trend to the downside.

The range of the minor is 102.375 to 104.105. The 50 percent level is support at 103.240.

Short-term range is between 99.810 and 104.105. If the primary trend shifts to the downside, look for the selling to reach its 50 percent mark around 101.958.

Short-Term Prognosis

The path of the U.S. Dollar Index for June will likely be determined by traders up until 103.800 on Friday.

The presence of buyers will be shown by a prolonged advance over 103.800. A breach of 104.105 would imply that purchasing is gaining strength. This may cause an acceleration to the upward without a specific target at this time.

A prolonged move below 103.800 will indicate weakness heading into the close. The initial negative objective is the pivot level at 103.240. This is a probable trigger point for a speed-up into the major bottom at 102.