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
Bullish
Oil - US Crude
Bullish
Wall Street
Bullish
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
Gold
Mixed
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
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • 🇰🇷 Business Confidence (NOV) Actual: 85 Previous: 79 https://www.dailyfx.com/economic-calendar#2020-11-24
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.42% France 40: 0.34% Germany 30: 0.22% Wall Street: 0.01% US 500: 0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/mUEoCcd11x
  • USD/MXN rates have broken through critical support in recent days, continuing the pair’s descent since the US elections in early-November. Get your $USDMXN market update from @CVecchioFX here:https://t.co/SC7HTzULrF https://t.co/icXuUkaA0f
  • Heads Up:🇰🇷 Business Confidence (NOV) due at 21:00 GMT (15min) Previous: 79 https://www.dailyfx.com/economic-calendar#2020-11-24
  • Canadian Dollar Price Outlook: USD/CAD Drops to Key 1.30-Level as Crude Oil Surges -via @DailyFX Link to Analysis: https://www.dailyfx.com/forex/market_alert/2020/11/24/usd-cad-price-outlook-canadian-dollar-climbs-with-crude-oil.html $USDCAD $CAD $CL_F #FX #Forex #OOTT https://t.co/MHRzYq6QfH
  • RT @RiskReversal: Join @GuyAdami & @RiskReversal for The Macro SetUp sponsored @IG_US. This week we discuss the FOMO gripping equity invest…
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.20% Silver: -1.57% Gold: -1.77% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ZzDjahQjms
  • I was very fortunate to have the opportunity to sit down and talk with @GuyAdami and @RiskReversal earlier this morning, where we discussed a number of hot topics in the market Give it a watch - https://t.co/hRFEpt1W26
  • EUR/GBP rates have struggled to gain traction one way or the other in recent weeks, producing choppy trading conditions. But a bearish breakout may be gathering pace. Get your $EURGBP market update from @CVecchioFX here:https://t.co/IK2CtpwwUi https://t.co/bxOmULuH8P
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 94.16%, while traders in NZD/USD are at opposite extremes with 72.74%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/CpBbonbT6n
US Dollar Aims for Fourth Gain in Five Days as EM FX Woes Deepen

US Dollar Aims for Fourth Gain in Five Days as EM FX Woes Deepen

2018-09-05 12:11:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- The BRATS currencies - Brazil, Russia, Argentina, Turkey, and South Africa - are facing another wave of pressure, weighing on global risk appetite.

- The Bank of Canada's rate decision should bring little new information, although traders will be looking for clues for the timing of the next rate hike.

- Retail trader sentiment is decidedly mixed on the US Dollar at the start of September.

See our longer-term forecasts for the US Dollar, Euro, British Pound and more with the DailyFX Trading Guides

The US Dollar (via the DXY Index) continues to start September on strong footing, rallying modestly thus far on Wednesday for what would be its fourth gain in five days. Prior to the recent topside effort, the DXY Index had lost ground in eight of the previous nine sessions.

Generally speaking, when price moves in one direction for a sustained period of time, it is very likely that a limited set of factors are consistently making their presence felt. For the past several weeks, no factors have been more prominent than US-led trade wars or emerging market contagion (a result of rising US interest rates and a stronger US Dollar itself).

Now that trading conditions have normalized, or are nearly back to normal given the end of the summer, investors are measuring the risks that have popped up in recent weeks and weighing the odds of the summer's problems continuing into the fall. If trading conditions at the start of September are any indication, then traders should buckle up for what will likely be a very volatile month.

Ongoing pressure in the BRATS currencies - Brazil, Russia, Argentina, Turkey, and South Africa - will only cater to higher demand for the US Dollar in the short-term. Ironically, it was the strong US Dollar (and higher US interest rates) that provoked concerns over emerging markets to begin with, and it has been a strong US Dollar that has emerged in the wake of said concerns; a circuitous feedback loop.

Elsewhere, attention is on the Bank of Canada this morning, even though no change in policy is anticipated. But rates markets are pricing in another 25-bps rate hike by the end of the year, with overnight index swaps suggesting an 88% chance of a 25-bps hike by December. Given developments in growth, inflation, and labor data, there is a strong argument to be made that the BOC would have already hiked rates again this year but for the overhang of the NAFTA negotiations.

DXY Index Price Chart: Daily Timeframe (January to August 2018) (Chart 1)

US Dollar Aims for Fourth Gain in Five Days as EM FX Woes Deepen

Overall, the DXY Index is finding more favorable footing in the short-term. Price is now back above its daily 8-, 13-, and 21-EMA envelope, while both daily MACD and Slow Stochastics have started to retrace their recent turns lower; the former is close to issuing a buy signal in bullish territory. As such, a 'neutral' bias is still applicable at the moment, but further price development through prior key resistance at 95.53 would give cause for an upgrade assessment moving forward.

Read more: US Dollar Rallying to Start September as August’s Concerns Carry Over

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

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

Follow him on Twitter at @CVecchioFX

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

DISCLOSURES