News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Rising yields (the aggregate yield I mentioned earlier is overlaid and inverted in red here) is dragging gold lower. The 60-day correlation (3 trading month) between $GC_F and yields is the strongest net negative since Oct 2019 https://t.co/Myo0FlsvJA
  • Commodities Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.42% Silver: -0.47% Gold: -1.10% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/fxdEWv4bfo
  • The Australian Dollar now risks a deeper March correction with the AUD/USD price reversal approaching multi-month uptrend support. Get your $AUDUSD market update from @MBForex here:https://t.co/jYfBrd5b22 https://t.co/tbU9BM3n3L
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.43%, while traders in Germany 30 are at opposite extremes with 80.92%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/W16EBX7wwK
  • US equities end the day mixed, as market participants continue to rotate $DOW 31801.91 +0.97% $SPX 3821.22 -0.54% $NDX 12299.0 -2.92% $RTY 2202.99 +0.49% $VIX 26.24 +6.41%
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.01% US 500: -0.01% France 40: -0.28% Germany 30: -0.29% FTSE 100: -0.34% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/LqhrKYMQFh
  • US Dollar strength continues, as USD/CHF surpasses 0.935 $USDCHF https://t.co/5RDZfc5tCp
  • The US Dollar set a fresh three-month-high on the back of a strong headline number in the Non-farm Payrolls report. Get your $USD technical analysis from @JStanleyFX here:https://t.co/ErM0N51RWP https://t.co/yzc3gfko6c
  • EUR/USD extends its recent decline, now trading 1.185 $EURUSD https://t.co/0P2HpTBq0R
  • USD/JPY strengthening during trade, adding to an impressive run for the Dollar/Yen pair in 2021 https://t.co/xHRuS8D2i0
USD Breakout Led by EUR/USD, USD/JPY - Bull Flags in USD/CAD, USD/CHF

USD Breakout Led by EUR/USD, USD/JPY - Bull Flags in USD/CAD, USD/CHF

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- EURUSD breaks through 1.3335 support and cracks to 1.3290.

- USDCAD, USDCHF flags may signal next USD-pairs to run.

- US Dollar strength in August shouldn't surprise - it's a seasonally strong month.

The USDOLLAR Index's ability to break through and hold above the 10544 level proved to be the spring board we thought it to be last week, propelling it to fresh highs by the greenback against its two largest traded counterparts.

With EURUSD sinking to its lowest exchange rate since September 13, 2013, and USDJPY rallying to its highest exchange rate since April 7, 2014, the US Dollar is well on its way towards breaking out. The US Dollar's rally in August fits neatly with the seasonal narrative, as the 5-year study called for US Dollar strength across the board in August.

In recent week, falling US yields and the flattening yield curve had little impact on the buck. For much of July and early-August, the 20-day correlation between the DXY and the 2-, 10-, and 30-year US Treasury yields was no more than +0.300 at max, a weak positive correlation.

USD Breakout Led by EUR/USD, USD/JPY - Bull Flags in USD/CAD, USD/CHF

However, as yields on the long-end have steadied near their lowest levels in a year, and the front-end of the yield curve continues to sell off, the US Dollar has still been able to rally. This speaks to the point that if low yields can't keep the greenback down, then how strong of a catalyst with higher yields?

If a broad US Dollar breakout is underway, led by EURUSD and USDJPY, then there are still opportunities elsewhere without risking so much 'chase.' USDCAD and USDCHF are both lined up in flagging patterns, still working their way towards our measured targets.

See the technical video for considerations specifically for EURUSD, USDCHF, and USDCAD.

Read more: USDOLLAR Index Hits 5-month High after US Housing Surges in July

--- Written by Christopher Vecchio, Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES