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. See our updated Privacy Policy here.

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
GBP/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
More View more
Real Time News
  • #PELOSI SAYS WE ARE GOING TO PASS THE INFRASTRUCTURE BILL THIS WEEK PELOSI SAYS SHE WILL NEVER BRING TO THE HOUSE FLOOR A BILL THAT DOESN'T HAVE THE VOTES TO PASS $USD $SPX $XAUUSD
  • Short-term uncertainties to keep the pressure on equity markets. Get your weekly equities forecast from @JMcQueenFX here: https://t.co/JLMDPZKvN8 https://t.co/YbdJnwoqj1
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/hqW38VawJl
  • - Unreal atmosphere - Shame about the result, but no complaints - Usyk masterclass - Heavyweight division blown wide open https://t.co/BKCLJTDk9h
  • The USD could still rally a bit from here, but has resistance not far ahead that it will need to overcome if it is to extend to a larger degree. Get your weekly $USD technical forecast from @PaulRobinsonFX here: https://t.co/n0CVWWOJDe https://t.co/0uLjsQ2gwM
  • When it comes to buying and selling forex, traders have unique styles and approaches. Learn about buying and selling forex here: https://t.co/D8DXSAdpqC https://t.co/nfiFAlyYXv
  • Slippage can be a common occurrence in forex trading but is often misunderstood. Understanding how forex slippage occurs can enable a trader to minimize negative slippage, while potentially maximizing positive slippage. Learn about FX slippage here: https://t.co/Blrl0unrdT https://t.co/mIsVJ4zTbB
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/hymrumanUY
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfs2Iz https://t.co/6dAqxsVfxJ
  • The results of this weekend’s German Federal Election will likely dominate Euro sentiment at the start of the week ahead but after a possible EUR/USD bounce they will have little long-term impact. Get your weekly $EUR forecast from @MartinSEssex here: https://t.co/Xu3ZT7EtrW https://t.co/5VHKn52MaA
Dollar Tumbles Third Straight Week, Is the Long-Term Bull Trend Over?

Dollar Tumbles Third Straight Week, Is the Long-Term Bull Trend Over?

John Kicklighter, Chief Strategist
Dollar Tumbles Third Straight Week, Is the Long-Term Bull Trend Over?Dollar Tumbles Third Straight Week, Is the Long-Term Bull Trend Over?

Fundamental Forecast for Dollar: Bearish

The Dollar has taken a nasty spill, but how do we reconcile the recent decline against years of rally and the proximity of a near-decade high? In the past three weeks, USDollar has dropped as much as three person – the most aggressive slide from the world’s most liquid currency since June of 2013. The past week’s tumble was especially pronounced given its fundamental leverage. Another significant downgrade in the Fed’s rate forecasts gave weight to speculative skeptics and traction in selling pressure to the tune of the sharpest two-day loss in over two years. Yet, is this the inception of a prolific bear trend or the limited evaporation of bullish excess? The influence of the market’s two most prominent themes (risk trends and relative monetary policy) and cross currency influence will decide.

There is little denying the momentum in recent selling pressure – following 10-months of flagging bullish conviction. And, recent fundamental developments seem to lend significance to the price move. This past week, the Federal Reserve held its benchmark range of 0.25 to 0.50 percent and pressed its concern over global stability. The reference is significant as it insinuates there are further hurdles to further hikes beyond the dual mandate of maximizing employment and stable inflation. The FOMC’s updated forecasts made that reticence certain. The already dubious projection for 100 basis points (bps) of hikes in 2016 – equivalent to four standard quarter percentage point increases – was downgraded to 50 bps of tightening through year’s end.

Such a significant fundamental downgrade for a currency that has climbed principally on its favorable monetary policy standing would naturally spur a retreat. Yet, the depth of the slide should be considered rationally. This is unlikely to prove a spark that burns with or without further oxygen to feed the short side’s momentum. Yet, when we consider the Greenback’s position even after the dovish downgrade; we are still dealing with a currency that is backed by speculation of higher yields into the future where most other policies involve active quantitative easing programs, rate cuts and even negative yield. So,while there may be some premium that needs to further burn off; we won’t likely see years of gains reversed before finding equilibrium.

Moving forward, the Dollar’s aura of a fundamentally-bulletproof currency has disappeared. That will make the Greenback more susceptible to subsequent changes in rate forecasts and to the temperament of the speculative crowd. According to the December Fed Funds futures contract, the market is still dubious of the central bank’s reduced forecasts for rates. The contract is pricing in a 90 percent probability of a single 25 bps hike. That still presents a serious discount to the official forecast and therefore room for speculative maneuvering. And, a persistence to back further rate hikes – any rate hikes - subverts the extreme skepticism born of the expected convergence of global monetary policy or a ‘Shanghai Accord’.

For data, the coming week is light for influence. Another round of Fed speakers will be on deck with the most influence for rate speculation. A National Activity Index from the Chicago Fed, durable goods orders and housing stats offer limited reach to the dual mandate. On the other hand, risk trends will represent a more capable grapple to Dollar volatility. The S&P 500 and other risk-oriented markets have extended a multi-week climb; but the fundamental backdrop to support the move is more than porous. Abrupt market moves are more likely to align to risk aversion; and the Greenback is likely to revert to a more responsive haven status. Risk or data moves this week however will be tempered somewhat by holiday trading conditions as March 25 is Good Friday for many markets.

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

DISCLOSURES