The U.S. dollar experienced a slump in March 2024 as gold prices skyrocketed to the $2,130 level on Wednesday. The DXY index shows the U.S. dollar dipping to the 103 level from a high of 104 last month in February. The world’s leading currency even fell to the 101 and 102 price range in January and February. However, the USD currency bounced back to 104 but is now facing strong resistance in the charts.
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However, the latest data shows that currency traders have not given up on the USD and are accumulating the dips in 2024. The U.S. dollar finds buyers in the dips as traders believe the currency could bounce back again. If currency traders open long positions at every dip, the USD will find resistance leading to its price consolidating.
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Currency Traders Remain Confident in the U.S. Dollar
Despite all the odds, the buying pattern indicates that currency traders are hopeful that the U.S. dollar could spike in June this year. The timing coincides with the Federal Reserve announcing an interest rate hike. The CME Watchtool has predicted that the Feds could raise interest rates by 25 bps during June this year.
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In general, the consolidation during the dips, and the interest rate hikes could bolster the U.S. dollar in Q2. Therefore, currency traders are taking early positions and accumulating the dips in the USD during Q1 of 2024.
History shows that the U.S. dollar has bounced back from all adversaries and remained to be the supreme global currency. This puts the USD on a pedestal where it takes little to nothing to dent investors’ confidence.
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The U.S. dollar has outperformed all leading currencies since 2022 including the Euro, Pound, Yen, and the Chinese Yuan. Read here to know how high or low the USD can reach this year in the indices.