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
EUR/USD
Mixed
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/9:30 AM GMT for insight on London #FX and #CFD trading. Register here: https://t.co/AoM3UvLtcF https://t.co/Ivf0i9c1UX
  • New Zealand Dollar may fall as the NZD/JPY and NZD/CAD exchange rates struggle to breach pivotal resistance. Get your $NZD market update from @DanielGMoss here:https://t.co/9QophdOC6X https://t.co/Q3kA0W0Tmu
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.49%, while traders in US 500 are at opposite extremes with 76.88%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/xT6YN1udNa
  • RT @IFM_Economist: For those saying the #RBA should cut the cash rate 25bp to 0% today, the effective cash rate is already at 0.13% to doin…
  • Commodities Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Silver: 0.13% Gold: -0.03% Oil - US Crude: -0.41% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/kUxV5Rnply
  • Forex Update: As of 07:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.25% 🇨🇦CAD: 0.17% 🇬🇧GBP: 0.16% 🇳🇿NZD: 0.09% 🇨🇭CHF: 0.06% 🇯🇵JPY: 0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/SaZz1bK4d0
  • 🇪🇸 Unemployment Change (JUL) Actual: -89.8K Previous: 5.1K https://www.dailyfx.com/economic-calendar#2020-08-04
  • #Gold and silver prices may turn lower based on bearish signals from IG Client Sentiment. Technical signals also warn the XAG/USD may fall, will XAU/USD meet the same fate? Find out from @ddubrovskyFX here:https://t.co/zzO5TdogF4 https://t.co/nUTpwNO3xD
  • Indices Update: As of 07:00, these are your best and worst performers based on the London trading schedule: France 40: 0.45% Germany 30: 0.45% Wall Street: 0.33% US 500: 0.22% FTSE 100: -0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/FsTXvFVtdO
  • Heads Up:🇪🇸 Unemployment Change (JUL) due at 07:00 GMT (15min) Previous: 5.1K https://www.dailyfx.com/economic-calendar#2020-08-04
US Dollar Pullback Hits Day Four; US-China Trade War Update; Brexit Latest

US Dollar Pullback Hits Day Four; US-China Trade War Update; Brexit Latest

2019-03-13 13:25:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points

- The DXY Index is down for a fourth day as the European currencies continue to make up ground as hopes to avoid to a “hard Brexit” scenario are building.

- Falling US Treasury yields may be helping prop up Gold prices, which have stabilized in recent days; Gold may retake the daily 21-EMA today for the first time since February 28.

- Retail traders are decidedly mixed on the US Dollar – EURUSD, GBPUSD, and USDJPY all have different biases.

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

The US Dollar (via the DXY Index) is experiencing its fourth day of losses as the European currencies continue to make up ground as hopes to avoid to a no deal, “hard Brexit” scenario are building. Gains by equity markets are helping quell the Japanese Yen, which may otherwise be having a better day given the downdraft in US Treasury yields (breaking out of a multi-week triangle to the downside) and the uptick in Gold prices.

US-China Trade Deal Nearing?

Risk appetite has been buoyed not just by the latest Brexit developments but by progress in the US-China trade war negotiations as well. US Trade Representative Robert Lighthizer has said that major issues still remain, but that “we are in the final weeks of having an agreement.” Markets have seemed to glob on to that particular piece of commentary, ignoring the foreboding tone otherwise: “There still are major, major issues that have to be resolvedand if those issues are not resolved in a way that’s beneficial to the United States, we will not have an agreement.”

Where does this leave us in the trade war news cycle? As we’ve previously noted, the cycle goes: (1) Trump administration is tough on China; (2) financial markets sell off on trade war concerns; (3) Trump administration hints at US-China trade deal; (4) financial markets rally on trade deal hopes; (5) No deal materializes. So it would appear that we’re now experiencing phase 4 – the rally after hope for a deal. Don’t be surprised if the next few days produce some news that a trade deal is unlikely, before hope springs anew next week (so it goes).

Brexit Latest – Another Vote in Parliament

Yesterday’s defeat of UK Prime Minister Theresa May’s Brexit deal wasn’t much of a surprise; after all, the parameters of the deal didn’t change since she suffered the historic 230 vote loss back in January. If anything, the tighter margin of 149 votes signals that, while unhappy with May’s deal, some MPs are more put-off by the idea of a no deal, “hard Brexit.” That means that the parliamentary vote scheduled for this evening London time – the question being “should the UK leave with no deal?” – has good chances of failing as well.

Part of me can’t help but recall May’s commentary about not wanting to endure a significant extension, saying it should be only “a matter of months” if one were granted. To this end, a request for an extension to the negotiating window seems likely. It’s possible, given May’s failure to whip together a coalition to support her plan, that she abdicates her role as prime minister and calls for another General Election.

GBPUSD Price Chart: Daily Timeframe (June 2018 to March 2019) (Chart 1)

US Dollar Pullback Hits Day Four; US-China Trade War Update; Brexit Latest

The concentration in news flow around the Brexit negotiations has contributed to a shift higher in volatility expectations for GBPUSD. Yet more significant price movements don’t necessarily translate into directional moves, as we’ve seen over the past several months. Indeed, since the bearish outside engulfing bar on June 14, 2018, GBPUSD has spent all but 16 days trading between 1.2660 and 1.3365 – that’s nearly 92% of the past nine-months within the range. So, for all the apocalyptic Brexit talk…GBPUSD doesn’t have much to show for it (not yet, anyway).

DXY Index Price Chart: Daily Timeframe (June 2018 to March 2019) (Chart 2)

US Dollar Pullback Hits Day Four; US-China Trade War Update; Brexit Latest

The broader gauge of the US Dollar has made little movement in recent months, today trading at levels seen back in February, January, December, November, and October. It’s possible that price action since mid-November has been coalescing into an ascending triangle against the 97.72 high set in November, December, and retested last week. While this may give a longer-term bullish bias in context of the consolidation developing after an uptrend, right now, the DXY Index’s forecast is necessarily neutral. Four consecutive days of losses has skewed the technical backdrop, with the both daily MACD and Slow Stochastics starting to point lower (albeit in bullish territory). Concurrently, with price enmeshed in the daily 8-, 13-, and 21-EMA envelope, patience is required before the next directional move becomes clear.

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 at cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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

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.