US Dollar turns flat for the week with Gaza ceasefire talks ongoing

• The US Dollar retreats from its peak performance on Monday.
• Traders brace for no less than three Fed speakers this Wednesday. 
• The US Dollar Index to snap below 104 in search of support. 

The US Dollar (USD) is losing traction from its peak performance on Monday. The effects from the upbeat US Jobs Report and geopolitical tensions – with ceasefire talks evolving in the Gaza region – are starting to favor the Greenback. Hamas has laid out a plan for a 135-day truce in three stages which is now under discussion by all parties. 

On the economic front, traders will be getting their hands on some mild data ahead. Nothing market moving is expected from the US Goods Trade Balance. Rather it is comments from the three US Federal Reserve (Fed) members who are due to speak later this Wednesday that could move the dial. These speakers are: Adriana Kruger, a member of the Board of Governors, who is  speaking near 16:00 GMT, Thomas Barking from the Richmond Fed, near 17:30 and Michelle Bowman, who like Kruger is also a member of the Board of Governors. She is set to speak near 19:00 GMT. 

Daily digest market movers: A light mid-week schedule

• At 12:00 GMT the weekly Mortgage Bankers Applications got released. Previous saw a contraction of 7.2% with this week an uprising of 3.7%.
• Around 13:30, the US Goods and Trade Balance numbers are expected:
• Goods and Services Trade Balance for December is expected to show a deficit of $62.2B versus $-63.2B deficit previously.
• The Goods Trade Balance was showing a $88.5 Billion deficit in the previous report with no forecast for the December number available. 
• As mentioned a few paragraphs above, no less than three Fed speakers will be hitting the wires today, Fed’s Kruger, Barking and Bowman.
• Near 18:00 the US Treasury will allot the always important 10-year Note in the market. 
• Equity markets are showing no signs of letting go of this bull run. Some very mild losses to report, but with most indices in the green across the board. Only the US Futures are lagging a bit at the start of this Wednesday.
• The CME Group’s FedWatch Tool is now looking at the March 20th meeting. Expectations for a pause are 78.5%, while 21.5% for a rate cut. 
• The benchmark 10-year US Treasury Note trades near 4.09%, off the peak from Monday near 4.17%.

US Dollar Index Technical Analysis: Taking a breather

The US Dollar Index (DXY) is taking a breather, so it seems, after its rally on Friday and Monday. The Greenback looks to be on its way to being proclaimed King Dollar again, although no real calls are put out there that DXY could pop back to 107. For now the equilibrium looks to be found with the DXY retreating a touch in search of support. 

Should the US Dollar Index move higher again, first look for a test at the peak of Monday, near 104.60. That level needs to be broken and is more important than the 100-day SImple Moving Average snap at 104.30. Once broken above that Monday high, the road is open for a jump to 105 with 105.12 as key level to keep an eye on. 

The 100-day SMA is clearly the unreliable boyfriend in the rally at the moment. A false break on Monday and no support provided on Tuesday from the moving average opens the door for a bit of a squeeze lower. The first ideal candidate for support is the 200-day SMA near 103.59. Should that give way, look for support from the 55-day SMA near 103 itself.