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
EUR/USD
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
GBP/USD
Mixed
USD/JPY
Mixed
Gold
Bullish
Oil - US Crude
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
Bitcoin
Mixed
More View more
Real Time News
  • Get your stock market basics right - what is the stock market and how does stock trading work? Find out here: https://t.co/JfAJLAtlsY https://t.co/ZfPUxHWeiG
  • The Mexican economy contracted for the first time in almost 10 years in 2019, but growth is expected to pick up in 2020 according to its finance minister. Get your $USDMXN market update from @HathornSabin here: https://t.co/gupJdU7WYT https://t.co/mMN8LFb5i5
  • EUR/USD has been weakening since the start of 2020 and the decline has accelerated this month. At some point there will be a correction but further losses are still likely as the year progresses. Get your $EURUSD market update from @MartinSEssex here: https://t.co/ieJUBNeAIf https://t.co/Dw4f7DQocg
  • The $AUD has risen in anticipation of a deal Washington and Beijing. But the Australia-China trade relationship has not suffered much and may even have been helped by China’s spat with the US. Get your market update from @DavidCottleFX here:https://t.co/An7h5X0Zcz https://t.co/Rn7mLbS1EF
  • How can traders avoid #FOMO in trading? Start by implementing a well-heeled plan taking only four hours per week. Get your insight from @JStanleyFX here: https://t.co/vwUShQPc27 #tradingstyle https://t.co/0Wn4xBL0AY
  • Do you know which type of stock is the right investment for you? Stock types help investors decide on specific #stocks to trade or assist with valuation methods either fundamentally or technically. Learn more about stock types here: https://t.co/yO3JalkqUU https://t.co/RoNdExHAdt
  • The status of the US #dollar as the safe-haven asset of choice remains untouched and any weakness in the greenback is likely to be short-lived. Get your $USD market update from @nickcawley1 here: https://t.co/LO2u38jpUT https://t.co/ctgCJSOeTH
  • #FTSE 100 testing key support as the index lacks a directional bias. #DAX reverses off channel top. Get your indices technical analysis from @JMcQueenFX here: https://t.co/IHF2dgMfg9 https://t.co/2fMTFlOeTR
  • With knowledge of price action, traders can perform a wide range of technical analysis functions without the necessity of any indicators, including management of risk. Build on you knowledge of price action here: https://t.co/9hQA0bsYtt https://t.co/5KQowxuiBf
  • The term ‘Ichimoku,’ literally means ‘one glance,’ in Japanese. Ichimoku, or the one glance indicator, is considered to be a self-contained system in the fact that no additional indicators are necessary. Learn more about the 'one glance' indicator here: https://t.co/T7o7W9C0Ro https://t.co/7bhBfWvEkR
USD Forecast: US Dollar Hinges on Virus Fear, Sentiment & Powell

USD Forecast: US Dollar Hinges on Virus Fear, Sentiment & Powell

2020-02-08 14:00:00
Rich Dvorak, Junior Analyst
Share:

US DOLLAR FUNDAMENTAL FORECAST LOOKS TO FED CHAIR POWELL SPEECH, CONSUMER SENTIMENT DATA & CORONAVIRUS DEVELOPMENTS

  • The US Dollar notched its highest close in 17-weeks driven in part by liquidity flows as traders move into safe-haven assets and Fed balance sheet growth decelerates
  • USD price outlook for next week likely hinges on the latest coronavirus developments out of China, US consumer sentiment data and commentary from Fed Chair Powell
  • EUR/USD and AUD/USD bears set their sights on multi-year lows amid widespread US Dollar outperformance against other major currency pairs

The DXY Index – a popularly referenced basket of key US Dollar currency pairs – has climbed an impressive 2.3% so far this year to the 98.70 price level. A big breakdown in EUR/USD, which comprises over half of the DXY Index, has helped fuel broader US Dollar strength as the American economy continues to outperform.

Nonfarm payrolls data released early Friday beat expectations and underscored the solid US jobs market, which exacerbated the slide in spot EUR/USD that began in the previous trading session on the back of dismal German data.

EUR/USD BULLISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -14% -5% -12%
Weekly -5% 20% 0%
Learn how to use Sentiment in your trading strategy
Get My Guide

Spot AUD/USD price action has meanwhile set fresh decade lows amid sustained concern over the novel coronavirus outbreak in Wuhan, China.

Downside in the Aussie relative to the US Dollar has potential to endure if it is revealed that Chinese trade and business activity will remain on hold in aim of containing the coronavirus.

Correspondingly, this development could keep providing a positive tailwind to the US Dollar on balance as forex traders seek out safe-haven currencies.

CHART OF TOTAL ASSETS HELD BY THE FEDERAL RESERVE – FED BALANCE SHEET

USD Forecast US Dollar Fed Balance Sheet Chart

Looking to domestic fundamental factors that stand to dominate the direction of the US Dollar next week we find that Fed Chair Jerome Powell will be providing his semi-annual update to Congress beginning at 15:00 GMT on February 11 and February 12.

USD Forecast
USD Forecast
Recommended by Rich Dvorak
Download our Comprehensive 1Q-2020 USD Forecast
Get My Guide

The leader of the Federal Reserve is expected to highlight an overall solid US economy and may help reinforce bullish USD price action recorded so far this year. Also, Powell will likely field questions over recent Fed balance sheet growth, which is arguably a bearish fundamental headwind that the US Dollar faces.

CHART OF CONSUMER SENTIMENT – UMICH SURVEY OF CONSUMERS

USD Forecast US Dollar Chart of Consumer Sentiment Historical Data

The monthly consumer sentiment report release from the University of Michigan’s Survey of Consumers – due this coming Friday, February 14 at 15:00 GMT – could also exert considerable influence on the US Dollar.

Preliminary January data for US inflation and retail sales are also set to cross the wires at 13:30 GMT on February 13 and February 14 respectively, which might spark notable reactions in USD price action as well.

Top Trading Opportunities in 2020
Top Trading Opportunities in 2020
Recommended by Rich Dvorak
Find out our Top Trading Opportunities for 2020
Get My Guide

That said, US economic indicators have generally topped market expectations as of late. Further evidence of this trend next week would likely bode well for the US Dollar.

Disappointing datapoints revealed next week could hinder possible upside continuation on the other hand. Lastly, event risk and high-impact data releases scheduled abroad throughout the upcoming trading week (detailed on the economic calendar) also hold potential to weigh on the US Dollar indirectly.

Keep Reading: US Dollar Setups Post-NFP for EUR/USD, USD/CAD, USD/JPY & More

-- Written by Rich Dvorak, Junior Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

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

DISCLOSURES

News & Analysis at your fingertips.