USD Graphic Rewind: Dollar Index Slips Below 9600; Restructuring Fears to Support
Created using Bloomberg
The dollar index fell for a fourth consecutive day on Friday and closed below the key 9600 level which could indicate a resumption of USD pressure which had taken a break throughout the month of May. Having now broken through support off the previous consolidation’s lows just around 9600, the next support doesn’t come in until 9550-9560 region, but isn’t very strong and things look like they could easily drop back toward the 9400 area and below in quick time.
While the technical outlook doesn’t look all that good for the index, fundamentally things are a little more supportive as Greek politics are in turmoil with the opposition refusing to agree to further austerity which may scupper any plans for further aid to the beleaguered nation and could result in debt restructuring. Until this problems are sorted out on the EMU periphery then the euro is likely to remain under steady pressure which should contain any downside moves in the index.
Written by Jonathan Granby, DailyFX Research Team
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.