Dollar wipes out gains after U.S. consumer sentiment data

Dollar wipes out gains after U.S. consumer sentiment data

dollarThe dollar erased its earlier gains versus the a basket of major currencies after a report showing U.S. consumer sentiment fell more than anticipated in May.

Consumer sentiment registered 88.6 in May from 95.9 in April, the University of Michigan’s preliminary reading showed.

The report adds more pressure on the green currency as it follows the release of downbeat retail sales figures this week, which signaled growth in the second quarter may remain weak.

With the release of a parade of downbeat data from the U.S., market expectations are soaring the Fed would push back the date at which the Fed would raise its borrowing cost.

The dollar index, which tracks the greenback’s movements versus a basket of major currencies, dropped from a high of 94.06 to hover around 93.32.

The session’s low was touched at 93.28, taking in mind that the index has found support near this level.

A closing below this support may send the six-currency gauge lower to 92.80 then 92.15.

The cross of SMA 20 over the SMA 50 may give support to the bearish scenario.

The RSI 14 momentum indicator is still not yet in oversold zones, which means there is more room for more bearishness.

Ahmed Mamdouh

Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at FXComment.com, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

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