Forex Trading Insights: Dollar Weakens on Dovish Core PCE Data 12-22-23


  • Overview of adventurous day for dollar index and core PCE number report

Core PCE Number Reaction

  • Expectation vs actual for core PCE numbers (expected 5.2%, actual 4.9%)
  • Dollar drops in reaction to lower than expected core PCE number
  • Dollar drops below 102 support level

Dollar Index Technical Analysis

  • Dollar could revisit 102 support like previous week
  • More bearish news expected Friday which could break 102 support
  • Watching for break of 100.175 minor quarter level

Other Dollar Pairs Technical Analysis

  • EUR/USD broke below 1.033 support
  • Target is 1.0325 major quarter level support
  • GBP/USD holding 127.25 minor quarter level
  • AUD/USD aiming to close above 0.68 and hold 0.70
  • NZD/USD attempting to reach 0.63 target
  • USD/JPY holding above 142.156 weekly open


  • Summary of bearish dollar expectations
  • Watch for any surprise news that could reverse dollar direction
  • Look for selling opportunities into the weekend

So today we had yet another adventurous day for the dollar index. And so with this, we had a call today. And so for the call that we have for today, it was for the report that came out today.

And so in that report, the last report of this week, we have come out with the core PCE numbers. With that report, the expectation was for it to come in at 5.2%, but instead it came in at 4.9%.

So with that drop, the dollar did indeed fall with that number coming in. And as a result of that, what we ended up doing and what we ended up having as a result of that,as far as for the GDP number, what we had as a result of that was the dollar continuing to drop. And so that’s when the dollar positioned itself, positioned itself right up underneath the 102 area.

But as the day continued to linger on, the dollar just continued to drop. So before we were talking about that, the dollar could revisit this box in the same way that it revisited this box before as far as last week, and that’s exactly what we have. But we still have Friday left.

So we still have Friday. And for Friday, there is more bearish news being expected for core PCE numbers. So with that more bearish news for core PCE numbers.

If those numbers come in exactly as expected, then we will likely get a break of this box and a break of this minor quarter level down here at 100 and 175. So that’s what we’re watching to see if that does indeed break.

We did get the breakdown of 133 here for the UC pair as well.

So we got the break here also. And so with that one, we can see the full breakdown here. And so now we have this minor quarter level.

We talked about that one earlier today, holding right now temporarily, we will likely get this one to end up dropping down to this major quarter level here, 132 500. So with 132 500 being the support area here, this is likely what will get the price to stop out and to pause out for.

The GU idea, we are looking for this one to make it back above127.

127 is that first spot. If this idea ends the week in an incredibly bullish manner, we could see a push up to this minor quarter level as well.

So that 127 25 area for the EU idea again recaptured.

And we talked about needing the close above 110, so needing the close above 110, looking for that and so securing that close there, looking for the one that will come next.

As far as a hold there above the major quarter 110 level again, we ended up getting the 68 cent level here, but we haven’t got in close. So we’re looking for that ,to secure that for the AU idea.

And then last but not least, for the NU idea, we are looking to secure this 63 cent area, which is what we call for at the top of the week. When we were down here at weekly open, we’re calling for the 63 cent area. It just missed here and then now doing another reattempt.

And so we are looking to sit in that 63 cent area with the bearish news coming in for the dollar.

Then looking at the UJ idea again. This one is holding on for dear life here at the weekly open. After bouncing, continued to sell off the entire week underneath all of its moving averages.

And so we are looking for a breakdown of this weekly open here at 142 156. And so that’s what we’re looking for going into the last day of the week, there shouldn’t be any surprises. The only surprise would be if the news comes in different than is expected.

And if that does indeed take place, then we know how to take and place the other side of the trade. Or you can just be patient and allow the bullishness to occur and then just take the fade going into the weekend. So again, if you guys have any questions, please feel free to reach out and ask those questions.

And I look forward to answering those questions and seeing you guys and trading with you guys as well. Take care. Bye.

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