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
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Wall Street
Bullish
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 93.73%, while traders in NZD/USD are at opposite extremes with 74.62%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Ej2mcEGBUh
  • BoC Deputy Governor Wilkins: Real estate bounce back has been 'sharp, 'aggressive' Pent-up demand drove sharp housing rebound Doesn't see a lot of speculation in housing - BBG $CAD
  • BoC Governor Macklem: Negative rates in toolkit; not being discussed Could lower effective lower bound, not be negative Ample scope to scale up QE if needed - BBG $CAD
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: US 500: 0.00% Wall Street: -0.00% France 40: -0.20% Germany 30: -0.21% FTSE 100: -0.26% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/QXuQhXMBLp
  • I’ve outsmarted the onions! Happy thanksgiving everyone 🦃 https://t.co/RjTjo5nawW
  • Contrary to standard belief, greed and profits are often inversely correlated in trading. Remaining disciplined is key to a successful trading strategy. Learn how to control greed when trading here: https://t.co/5GXReUsKRj https://t.co/S2DZkNw7Tc
  • BoC Governor Macklem: Risk around our projection "roughly balanced" Inflation projected to remain less than 2% into 2023 - BBG $CAD
  • BoC Governor Macklem: BoC expects economy to shrink 5.5% in 2020 Economy to be operating below potential into 2023 Inflation is unusually weak - BBG $CAD
  • BoC Governor Macklem: Rates will stay very low for very long time Very rapid growth of the reopening phase is now over Annual growth to average almost 4% in 2021, 2022 - BBG $CAD
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Gold: 0.12% Silver: -0.06% Oil - US Crude: -1.57% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ccissyaJkX
US Dollar Teetering as US Yields Threaten Pullback

US Dollar Teetering as US Yields Threaten Pullback

2017-01-10 13:15:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- DXY rally has been driven by higher US Treasury yields, which have slipped back to key support levels.

- If USD/JPY falls back, Gold has a clear path to 1200/10.

- See the DailyFX Economic Calendar for today's data and read our weekly outlook on key event risk.

Webinar Schedule

Mondays, 7:30 EDT/12:30 GMT: FX Week Ahead: Strategy for Major Event Risk

Wednesdays, 6:00 EDT/11:00 GMT: Trading Q&A

Thursdays, 7:30 EDT/11:00 GMT: Central Bank Weekly

The US Dollar has been struggling to find meaningful traction over the last few days, as a combination of profit taking and speculation over how wage data will influence have led to a choppy trading environment. With a rather dull economic docket the next two days (ahead of the five Fed speakers on Thursday), traders may want to pay attention to the main driver behind the US Dollar rally in the first place: US Treasury yields.

Both the US Treasury 2-year and 10-year yields have increased significantly over the past two months, starting with the US elections in early-November. The recent pause in the rising yield environment has proven to be a signficant hurdle for the US Dollar to clear; indeed, USD/JPY and EUR/USD have started to back away from their recent bullish-USD tendencies.

The key question is whether or not market participants feel warranted in maintained their current aggressive outlook. After all, with the CFTC's COT report showing that speculators are the most net-short US Treasuries (long yields) ever, it will only take a small bit of disappointment - on either the data side or from the Fed - before momentum collapses on itself and yields pullback.

The line in the sand is clear for me: abandon USD-bullishness in the near-term if the US 2-year yield closes its daily 34-EMA or 1.145%; and if the US 10-year yield trades below 2.333% (which would take out the January 2017 and December 2016 lows). If yields maintain these levels, then the US Dollar pullback should be limited. A break higher above 1.255% in the US 2-year yield or above 2.578% in the US 10-year yield would signify strong potential for a further resumption of the US Dollar's recent uptrend.

See the above video for a technical review of the DXY Index, EUR/USD, GBP/USD, AUD/USD, USD/JPY, GBP/JPY, EUR/GBP, and Gold.

Read more: FX Markets Turn Attention to Chinese and US Data, Fed Speakers this Week

--- Written by Christopher Vecchio, Senior 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

View our long-term forecasts with the DailyFX Trading Guides.

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

DISCLOSURES