DOLLAR INDEX (DXY) Showing Signs of Exhaustion!
With the crucial 97.00 area rejected and acting as a concrete resistance, DXY is showing signs of exhaustion both technically and fundamentally!
Looking at the fundamental picture, the FED has already signaled that its pausing its rate hike, moreover the trade war among the two largest economies in the world is just putting to much pressure on the greenback. FED signaled the economy is stable however the signs of slight economic slowdown are already visible with china imposing high tariffs on US goods. Today's core durable order and Philadelphia manufacturing index both came below expectations and as we wait for the existing home sales report later today it would not be a surprise if the reading is below expectation. Even considering the future economic calendar releases most of the readings will likely be below the forecast as well considering if a trade deal has not been reached. In short at the moment its not looking that good for the greenback at the moment fundamentally!
Looking at the technical aspects, the crucial 97.000 level was the key resistance that was rejected and now if the trendline is violated the price might head towards the next support that lies in the 93.00 region.
If the trendline is violated we should be prepared for a big drop in the DXY. Certain pairs that are highly correlated with the DXY such as EURUSD can be traded with added confluence.
Looking at the fundamental picture, the FED has already signaled that its pausing its rate hike, moreover the trade war among the two largest economies in the world is just putting to much pressure on the greenback. FED signaled the economy is stable however the signs of slight economic slowdown are already visible with china imposing high tariffs on US goods. Today's core durable order and Philadelphia manufacturing index both came below expectations and as we wait for the existing home sales report later today it would not be a surprise if the reading is below expectation. Even considering the future economic calendar releases most of the readings will likely be below the forecast as well considering if a trade deal has not been reached. In short at the moment its not looking that good for the greenback at the moment fundamentally!
Looking at the technical aspects, the crucial 97.000 level was the key resistance that was rejected and now if the trendline is violated the price might head towards the next support that lies in the 93.00 region.
If the trendline is violated we should be prepared for a big drop in the DXY. Certain pairs that are highly correlated with the DXY such as EURUSD can be traded with added confluence.
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