The US Dollar (USD) measured by the US Dollar Index (DXY) oscillates between gains and losses in the 106.15 area, trading below the 20-day Simple Moving Average (SMA). No relevant data will be released on Friday and the focus shifts to the Israel and Palestine conflict which could benefit the USD as a safe-haven asset. In the United States, economic activity was reported to be better than expected in September. Industrial Production and Retail Sales both came in above expectations. On Wednesday, the Federal Reserve’s Beige Book report described the US economic situation as “stable” and didn’t reveal any new insights since the last September report. Next week, the US will release S&P Manufacturing PMIs from October, which may have an impact on the expectations from the Federal Reserve’s (Fed) next set of forecasts.

The DXY index is in an intermediate bullish trend on the daily chart, holding above the key 100 and 200-day Simple Moving Average (SMA). However, in the short term, bears have gathered enough momentum to give them an upper hand over the bulls.

On the daily chart, the Relative Strength Index (RSI) is seen pointing south, though still above its middle point of 50. The Moving Average Convergence Divergence (MACD) saw a bearish cross on October 5, though the trend lower flipped on October 12 when the market made a recovery. Given the dominant uptrend, the exchange rate could still rally. The index has had a strong run higher, with 11 consecutive up-weeks in a row before peaking and forming a bearish doji/shooting star candlestick in the first week of October. This was not followed through to the downside, however, with the following week closing higher. Still it is a warning sign of potential weakness on the horizon. Supports: 106.00, 105.80, 105.80. Resistances:106.33 (20-day SMA),106.50, 107.00.