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7:35 AM · 28 October 2021

Chart of the day - USDIDX (28.10.2021)

USDIDX
Indices
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Investors will get a first look at the overall performance of the US economy in the Q3 2021 today, when the flash GDP report is released at 1:30 pm BST. Market consensus points to a big slowdown compared to the second quarter. Annualized GDP growth is expected at 2.7%, down from 6.7% in the previous quarter. Slowdown in the post-pandemic recovery can be blamed on much more severe supply chain issues in the July-September quarter. Core PCE inflation for the third quarter is expected at 4.5% QoQ, down from 6.1% QoQ in Q2 2021. Elevated volatility on the US dollar can be expected around the release time.

A look at the US dollar index (USDIDX) at daily interval shows that the index halted downward move ahead of the upward trendline and started to recover. Today's GDP release will surely be taken into consideration by Federal Reserve when it announces decision next week. While taper announcement this year looks like a done deal, a solid release will cement expectations on announcement in November. The major near-term resistance zone for USDIDX ranges between 94.50 and 38.2% retracement of downward move started in late-Q3 2020 (94.75). In case of a break above, the next important resistance can be found near 50% retracement (96.50).

Source: xStation5

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