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.

Free Trading Guides
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
More View more

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • The US Dollar remains in consolidation mode against the Philippine Peso and Indian Rupee. Will the Singapore Dollar weaken as $USDSGD rising support holds ahead? Find out from @ddubrovskyFX here: https://t.co/HZ8Loqj3Ey https://t.co/6PCFkdj3ka
  • Follow @DailyFXedu for your regular #webinar updates with @DailyFX analysts and catch up on the webinars you missed. https://t.co/Da10QUg9r1
  • Greed has proven to be a hindrance more than assistance for traders. How does greed lead to #FOMOintrading? Find out from @RichardSnowFX here: https://t.co/aT8TZjlFqP https://t.co/Le8Qx6OOwV
  • $GBPUSD at the moment break-even straddles = 152pips meaning that for option traders to realize gains, the spot price must see a move greater than 152pips. Get your market update from @JMcQueenFX here: https://t.co/odj2lLRrGf https://t.co/RXCBwHGluG
  • $EURGBP has fallen over 6% since August and is now rapidly approaching a critical support level not reached since May. Will a break below accelerate the aggressive selloff? Find out from @ZabelinDimitri here: https://t.co/CBM8Fg7vM0 https://t.co/0yDnEpzQqR
  • The #Euro is struggling for direction against the US Dollar but the near-term downtrend guiding it lower since late June remains firmly intact. Where is $EURUSD heading? Get your technical analysis from @IlyaSpivak here: https://t.co/us6AINmuoe https://t.co/J4hQtyprYf
  • $DXY & $SPX500 hold steady after #FED rate cut. Get your update from @JohnKicklighter here: https://t.co/vqXlKCMDYA
  • Dow Jones & Dax 30 levels to watch ahead of the fed from @PeterHanksFX here: https://t.co/iUIrsygKz2
  • The politics of the US and UK may be starkly divided but their grip on the vast, $6.6 trillion global foreign exchange trade seems as tight as ever. Get your market update from @DavidCottleFX here:https://t.co/xTKHOvrIqg https://t.co/vtHhdnF82Q
  • How can confidence in trading help with avoiding #FOMOintrading? Find out from @WVenketas here: https://t.co/MY7j9ISn4S https://t.co/n7XwfiDZz2
US Dollar Erases Gains as Italy Secures Budget Deal, Brexit News Looms

US Dollar Erases Gains as Italy Secures Budget Deal, Brexit News Looms

2018-10-16 20:00:00
Christopher Vecchio, CFA, Sr. Currency Strategist

Talking Points:

- Capital flight out of US financial markets seems to be the common theme on the day, with the US Dollar falling alongside US Treasuries and all three major US stock indices.

- Concerns are cropping up about the rise of interest rates, which could choke off growth in all corners of the globe.

- Retail traders are quickly neutralizing positioning across USD-pairs, and sentiment is turning 'mixed' as a result.

Looking for longer-term forecasts on the US Dollar? Check out the DailyFX Trading Guides.

The US Dollar (via the DXY Index) has seen of all its daily gains erased ahead of the US cash equity open today, thanks to an ongoing rebound in risk appetite on the back of positive news out of Europe. With the Italian government appearing to have secured a budget deal, the Euro has been able to turn higher as Italian BTP yields have dropped.

The news out of Italy is clearly overshadowing whatever other news about the Eurozone developing today; look no further than the lack of reaction to the October ZEW Surveys. The sentiment readings for the Eurozone and Germany came in at or fresh lows of the year, in the case of the former, the worst reading since early-2012.

Nevertheless, despite some signs that economic data momentum continues to erode for the Eurozone - the Citi Economic Surprise Index entered the week at -24.8 after starting the quarter at +3.6 - the Euro has proved resilient. The fact of the matter is that any reduction in the perceived risk that Italy could move down a path towards exiting the bloc, especially in an environment where populism and protectionism are gaining traction, will overshadow much of anything else coming across the news wire. The Euro's ability to ride this catalyst higher will depend soley on how far Italian BTP yields can pull back.

In the same vein - data being overshadowed by larger thematic influences - the British Pound has failed to capitalize on earlier wage growth figures which, were these normal market conditions, would easily stir speculation over a near-term rate hike by the Bank of England. But no BOE rate hike odds have moved today thanks to the looming specter of Brexit; indeed, over the next few days, untl the issue of Brexit is resolved, nothing else will practically matter for Pound sterling.

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

US Dollar Erases Gains as Italy Secures Budget Deal, Brexit News Looms

Even as the US Dollar has slipped out of the spotlight, none of the developments have been meaningful enough to change the tone of the technical picture. Price is back below its daily 8- 13-, and 21-EMA envelope, while daily MACD is now compressing at the signal line. Given that the DXY Index closed last week below 95.53, a neutral outlook is warranted for the foreseeable future, with bearish momentum gathering steam.

Read more: FX Week Ahead: US Retail Sales, FOMC Minutes, CPI from NZ, UK, & Japan


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

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


News & Analysis at your fingertips.