The S&P 500 Rebounds 0.84% And The Dollar Index Falls 1.36%, Yet Both Hold The Potential To Surge

• The S&P 500 experienced a significant recovery on the last trading day of the month, increasing by 0.84%.
• In contrast to the stock market, the U.S. dollar index dropped by 1.36%.
• Throughout 2023, the U.S. dollar has shown moderate growth, rising by 3.54%.

The stock market bounced back strongly on the last trading day of the month. The S&P 500 rose by 0.84% on Friday, ending the month with a 4.73% gain. This rebound shows growing investor confidence after a volatile period.

While the stock market rebounded, the U.S. dollar index followed a different path, marking its first monthly drop of the year with a 1.36% fall. Despite this, the dollar has remained stable around the $103 mark, a key level that has acted as both resistance and support since January 2017.

This level has historically been a threshold the dollar has crossed multiple times, suggesting it could potentially bounce back, similar to the recent stock market move.

Throughout the year, the dollar has moderately risen, gaining 3.54%. However, it remains stuck within a narrow range between the 2023 low of $99 and the 2023 high of $107.

This consolidation phase, which has been ongoing since July 2023, has prevented the dollar from making a clear move up or down. Investors must closely watch these levels, as breaking out of this range will likely indicate the currency's future direction.

From January 2021 to September 2022, the dollar rose by 28% before entering its current consolidation phase, indicating an overall upward trend.

If If it breaks above the consolidation resistance, it could resume its long-term bullish trend and aim for the September 2022 peak of $114, which is the next resistance level.

The daily 200 simple moving average supports this potential rise, providing strong support for the dollar's price. This indicator offers a base from which the dollar could potentially launch and climb to higher levels.

After the closing bell on Friday, May 31, the dollar closed at $104.62, trading down by 0.04%.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.