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.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Oil - US Crude
Wall Street
More View more
Real Time News
  • 🇫🇷 Unemployment Benefit Claims (OCT) Actual: -56.6K Previous: -15.2K
  • Indices Update: As of 11:00, these are your best and worst performers based on the London trading schedule: France 40: -0.17% US 500: -0.18% Wall Street: -0.25% Germany 30: -0.36% FTSE 100: -0.40% View the performance of all markets via
  • Heads Up:🇩🇪 Bundesbank Wuermeling Speech due at 11:15 GMT (15min)
  • As a trader do you know when the markets let you take a break? Find out when the stock markets are closed. Check out @DailyFX holiday calendar here.
  • Heads Up:🇫🇷 Unemployment Benefit Claims (OCT) due at 11:00 GMT (15min) Previous: -15.2K
  • 🇿🇦 Business Confidence (Q4) Actual: 40 Previous: 24
  • Heads Up:🇿🇦 Business Confidence (Q4) due at 10:00 GMT (15min) Previous: 24
  • Traders tend to overcomplicate things when they’re starting out in the forex market. This fact is unfortunate but undeniably true. Simplify your trading strategy with these four indicators here:
  • Heads Up:💶 ECB Financial Stability Review due at 09:30 GMT (15min)
  • 🇵🇱 Unemployment Rate (OCT) Actual: 6.1% Expected: 6.1% Previous: 6.1%
USD Surges Higher as Bernanke Discusses Exit Strategy

USD Surges Higher as Bernanke Discusses Exit Strategy

2013-05-22 14:55:00
David Song, Strategist





Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index






Forex_USD_Surges_Higher_as_Bernanke_Discusses_Exit_Strategy_body_ScreenShot270.png, USD Surges Higher as Bernanke Discusses Exit Strategy

Chart - Created Using FXCM Marketscope 2.0

Although the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is trading 0.24 percent higher from the open, we saw a dip in the reserve currency as Fed Chairman Ben Bernanke warned of tightening monetary policy prematurely. Indeed, the prepared remarks sounded fairly dovish as the central bank head pledges to preserve the highly accommodative policy stance as long as needed, but the market reaction was short-lived as Mr. Bernanke warned of keeping the benchmark interest rate too low for too long. Nevertheless, the greenback could be carving out a near-term top ahead of June it struggles to maintain the upward trend from earlier this month, but we anticipate a higher low in the USDOLLAR as a growing number of Fed officials scale back their willingness to expand the balance sheet further.

Forex_USD_Surges_Higher_as_Bernanke_Discusses_Exit_Strategy_body_ScreenShot271.png, USD Surges Higher as Bernanke Discusses Exit Strategy

As the relative strength index continues to come off of resistance (78), the oscillator certainly points to a near-term correction in the USD, but the bullish sentiment surrounding the reserve currency may gather pace over the next 24-hours of trading should the FOMC Minutes further dampen speculation for additional monetary support. Indeed, the policy statement may reflect a greater discussion to taper the asset purchase program as the world’s largest economy gets on a more sustainable path, and the downside should be limited for the greenback amid the shift in the policy outlook. As we look for a higher low in the USDOLLAR, we may see former resistance around 10,600 act as support, and we will maintain a bullish outlook for the greenback as the recovery gradually gathers pace.

Forex_USD_Surges_Higher_as_Bernanke_Discusses_Exit_Strategy_body_ScreenShot272.png, USD Surges Higher as Bernanke Discusses Exit Strategy

Three of the four components weakened against the greenback, led by a 0.91 percent decline in the Australian dollar, while the Japanese Yen shed 0.85 percent even as the Bank of Japan (BoJ) interest rate decision failed to shift the policy outlook. Nevertheless, we should see the USDJPY continue to push higher in the second-half of the year amid the deviation in the policy outlook, but we will keep a close eye on the relative strength index as it persistently flirts with overbought territory.

--- Written by David Song, Currency Analyst

To contact David, e-mail Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

Bring the economic calendar to your charts with the DailyFX News App.

New to FX? Watch this Video

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

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