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
Mixed
Oil - US Crude
Bearish
Wall Street
Bullish
Gold
Bullish
GBP/USD
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
USD/JPY
Bearish
More View more
Real Time News
  • #Bitcoin prices may see a pickup in volatility ahead of the 2020 halving as the #coronavirus pandemic threatens to disrupt cross-continental $BTC mining operations. Get your market update from @ZabelinDimitri here: https://t.co/BoH24MVf4P https://t.co/yuEA4wdlS9
  • Forex Update: As of 07:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.06% 🇳🇿NZD: -0.05% 🇨🇦CAD: -0.17% 🇨🇭CHF: -0.48% 🇯🇵JPY: -0.61% 🇬🇧GBP: -0.87% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/hOyPH71ZfE
  • Indices Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Germany 30: 1.85% France 40: 1.47% US 500: 0.46% Wall Street: 0.38% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/UxILaRvSdH
  • 🇨🇭 CHF Retail Sales Real (YoY) (FEB), Actual: 0.3% Expected: N/A Previous: -0.1% https://www.dailyfx.com/economic-calendar#2020-03-31
  • Missed today's #AUDUSD weekly outlook webinar? See the recording here - https://t.co/6k1KCuxr50 Some of the topics discussed were: - #coronavirus economic impact - #Fed #QE as catalyst for AUD rise - scope for renewed #USD gains
  • RT @DailyFXEspanol: Análisis del $XAUUSD: El precio del oro se estanca, ¿qué nos dice el gráfico? #trading #covid19 https://t.co/7x2Zdt0AnA…
  • USD/CAD IG Client Sentiment: Our data shows traders are now net-long USD/CAD for the first time since Jan 22, 2020 when USD/CAD traded near 1.31. A contrarian view of crowd sentiment points to USD/CAD weakness. https://www.dailyfx.com/sentiment https://t.co/KjIkTKOFmC
  • Asia’s vast and growing importance to the world economy is not yet matched by the presence of a currency trading center to rival the established order. Get your update on market drivers in Asia here: https://t.co/r3Ku0p9dw1 https://t.co/JVzLj6lON7
  • European Opening Calls From IG: #FTSE 5558 -0.10% #DAX 9865 +0.50% #CAC 4394 +0.35% #AEX 476 -0.08% #MIB 16974 +0.60% #IBEX 6749 +1.34% #OMX 1457 +0.52% #STOXX 2779 +0.49%
  • Heads Up:🇨🇭 CHF Retail Sales Real (YoY) (FEB) due at 06:30 GMT (15min), Actual: N/A Expected: N/A Previous: -0.1% https://www.dailyfx.com/economic-calendar#2020-03-31
U.S. Dollar Index Correction On Tap, Euro Weakness To Gather Pace

U.S. Dollar Index Correction On Tap, Euro Weakness To Gather Pace

2011-08-10 17:46:00
David Song, Strategist
Share:

DJ FXCM Dollar Index

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

9611.61

9621.32

9508.66

0.85

121.77%

U.S._Dollar_Index_Correction_On_Tap_Euro_Weakness_To_Gather_Pace_body_ScreenShot115.png, U.S. Dollar Index Correction On Tap, Euro Weakness To Gather Pace

The greenback regained its footing on Wednesday, with the Down Jones-FXCM U.S. Dollar index advancing to 9621.32, and the reserve currency may continue to recoup the losses following the FOMC rate decision as it benefits from safe-haven flows. The USD is 0.85% higher on the day after moving 122% of its average true range, but we could be seeing a material shift in the greenback as price action breaks out of the upward trending channel. As the 30-minute relative strength index falls back from overbought territory, the downturn in the oscillator certainly points to a near-term correction, and the index may fall back towards the lower bounds of the Bollinger Band around 9482.08. However, should market participants continue to scale back their appetite for yields, the drop in market sentiment will certainly help to prop up the greenback as risk trends dictate price action in the foreign exchange market.

U.S._Dollar_Index_Correction_On_Tap_Euro_Weakness_To_Gather_Pace_body_ScreenShot114.png, U.S. Dollar Index Correction On Tap, Euro Weakness To Gather Pace

In light of the recent comments by the FOMC, Chairman Ben Bernanke’s August 26 speech at Jackson Hole will come into focus as investors raise bets for another round of quantitative easing. As the Fed plans to carry its zero interest rate policy well into 2013, the move highlights a growing risk of a double-dip recession, and the central bank may weigh alternative measures to stimulate the world’s largest economy given the slowing recovery. Until we get more comments from the central bank head, we may see the dollar index consolidate in the days ahead, but the greenback may threaten the rebound from 9322.14 should Mr. Bernanke show an increased willingness to expand the Fed’s balance sheet further.

U.S._Dollar_Index_Correction_On_Tap_Euro_Weakness_To_Gather_Pace_body_ScreenShot116.png, U.S. Dollar Index Correction On Tap, Euro Weakness To Gather Pace

Three of the four components weakened against the greenback on Wednesday, led by a 1.38% decline in the euro, and the single-currency remains at risk of facing additional headwinds as policy makers struggle to contain the sovereign debt crisis. Indeed, Fitch Ratings lowered its credit rating for Cyprus, and the EU could be forced to increase the scope of the European Financial Stability Facility in order to stem the heightening risk for contagion. At the same time, the European Central Bank may increase its participation in the bond market, and the Governing Council may show an increased willingness to keep the benchmark interest rate on hold for the remainder of the year as the region faces a slowing recovery. As the EUR/USD continues to trade within a bearish pattern, the near-term rebound in the exchange rate is likely to be short-lived, and the euro-dollar may threaten the rebound from 1.3638 as rate expectations falter.

Join us to discuss the outlook for the major currencies on the DailyFXForums

To discuss this report contact David Song, Currency Analyst: dsong@dailyfx.com

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

DISCLOSURES

News & Analysis at your fingertips.