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The Risk Events May Affect DXY This WeekHigh volatility will very likely continue this week considering the high profile events featured. Firstly, the “deadline” of December 15 for US-China trade negotiation approaches. We’ll quickly know if there is a deal, or at least progress, to avert the new tariffs on USD 156B of Chinese imports. Secondly, GBP is currently pricing in a Conservative majority after December 12 elections. With that, Prime Minister Boris Johnson’s Brexit deal should be approved quickly to pave the way for orderly Brexit on January 31 finally. Thirdly, three central banks will meet - Fed, SNB and ECB. Fed fund futures are pricing in near 100% chance for Fed to stand pat. Yet, the traders would be eager to know if policy makers are projecting Fed to stay on hold throughout next year. It will also be Christine Lagarde’s first ECB meeting as President. Dollar index dropped to as low as 97.35 last week, a one-month low, which is also about the middle of this year's range, but recovered after that. It also had closed below the lower line of Bollinger Bands (~97.50) but finished the week back inside. The MACD and Slow Stochastics are still reflecting the past downside momentum, and in the current context, they may be less of a guide. Outlook is starting to look vulnerable again but there is no clear bearishness yet. Current development now raised the chance that Dollar index’s recovery from 97.11 was only a corrective rise, and has completed at 98.54. Next focus will be 97.11 support. A sustained break bellow 97.11 support will lead the bears for testing 200-week SMA (96) and may be would firmly taken out. If that happen, it will suggests that 99.66 is already a medium term top. Further decline would likely be seen to 38.2% retracement on the rise of 88.25 to 99.67 at 95.31 at least. But until the Dollar index keep moving above 200-day SMA on weekly chart, the uptrend from 88.26 (2018 low) is in favor to extend. Above 98.54 resistance will reaffirm this bullish case and bring retest of 99.67 high first. What do you think?
TVC:DXY
by ForexTrendline
Could DXY resume its gains?The U.S. dollar index was flat yesterday after the number of Americans applying for unemployment benefits rose to an unexpected five-month high. The biggest move within the basket was against the Aussie dollar, which fell 1% to its lowest in nearly a month after an abrupt weakening of the Australian labor market. The last dip is likely to be limited to 98 while the near-term uptrend remains intact. So far, USD is on track for a positive close in November, a month which has historically been favorable to bulls. Yet nothing moves in a straight line and it appears bears could also have their say. Given the strength of bullish momentum from the 97.00 support one, the bias is for a minor pullback for testing 98.39/45. That area includes the weekly high and 50% Fibo retracement from 99.67 to 97.11 on daily chart. This is a potential trigger point for an acceleration to the upside and for DXY to head towards 98.65 resistance (15 Oct.'s high). DXY now is challenging the 98.10 support level and the 200-day SMA on the four-hour chart. So, a dip to the 98.00 handle cannot be ruled out. In case of clear break bellow that level, the next support is 100-day SMA on H4 chart at 97.85. The economic calendar also shifts focus today to the U.S Dollar. Following Powell’s positive outlook on the economy, retail sales will need to impress… On the geopolitical front, updates on trade talks between the U.S and China will continue to influence.
TVC:DXYLong
by ForexTrendline