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.

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
EUR/USD
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
Wall Street
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
Gold
Mixed
GBP/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
USD/JPY
Mixed
More View more
Real Time News
  • $USDCAD sold off aggressively last week, putting it into position to test the important 2017 low; trading bias is neutral to bearish. Get your market update from @PaulRobinsonFX here: https://t.co/sphxUAW9TB https://t.co/ZhsTeJOOM8
  • Get your snapshot update of the of top level exchanges and key index performance from around the globe here: https://t.co/d8Re5anlG5 https://t.co/qP96xmgDVn
  • The pro-risk Australian Dollar may extend gains after the record miss in US jobs data, amplifying dovish rhetoric from the Federal Reserve and keeping the Dow Jones and S&P 500 intact. Get your market update from @ddubrovskyFX here: https://t.co/yf8mPX3O3W https://t.co/uCCmjaxUhF
  • Who else is keeping close tabs on Dogecoin $DOGE this weekend? All eyes on Elon Musk @elonmusk, the proverbial 'Dogefather,' and his Saturday Night Live @nbcsnl performance kicking off at 11:30PM ET. The #crypto is already looking nice and perky following that trendline break! https://t.co/nrQsnlUqWj https://t.co/4lOz6NLQTG
  • There is some very interesting event risk over the opening half of this coming week of trade. It starts with Elon Musk hosting SNL tonight for Dogecoin traders and moves into US inflation data to as means to stir the ongoing Fed debate and Dollar https://www.dailyfx.com/forex/video/daily_news_report/2021/05/08/Dollar-Tumbles-Dow-Hits-Record-Highs-and-Dogecoin-Traders-Tune-In.html https://t.co/LXhjv7ToWC
  • It was a big week for Gold bulls and Gold prices broke out to fresh two-month-highs, finally taking-out the 1800 level along the way. Get your market update from @JStanleyFX here: https://t.co/D222Ni37Dv https://t.co/KcMYyx3Ro4
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/PjywaPeUsl
  • 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/AjOSPzOFLb
  • What are some trading takeaways from 2020, as we jump into the new year? Find out with your free guide here: https://t.co/e7udCTJlmf #DailyfxGuides https://t.co/eqklbOEJMa
  • Trading Forex is not a shortcut to instant wealth, excessive leverage can magnify losses, and sentiment is a powerful indicator. Learn about these principles in depth here: https://t.co/lZFM8youtX https://t.co/p9Pkkbo2zf
USDOLLAR to Benefit from Fed Exit Strategy- Higher High on Tap

USDOLLAR to Benefit from Fed Exit Strategy- Higher High on Tap

David Song, Strategist
Forex_USDOLLAR_to_Benefit_from_Fed_Exit_Strategy-_Higher_High_on_Tap_body_ScreenShot073.jpg, USDOLLAR to Benefit from Fed Exit Strategy- Higher High on TapForex_USDOLLAR_to_Benefit_from_Fed_Exit_Strategy-_Higher_High_on_Tap_body_ScreenShot070.png, USDOLLAR to Benefit from Fed Exit Strategy- Higher High on Tap

Chart - Created Using FXCM Marketscope 2.0

Although the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is trading 0.19 percent lower from the open, the Federal Open Market Committee (FOMC) interest rate decision could be the game-changer for the greenback should the central bank look to taper its asset-purchase program. As the reserve currency carves a higher low in June, a less-dovish Fed may prompt the USDOLLAR to breakout of the downward trend carried over from the previous month, and we may see the index resume the upward trend from earlier this year as the central bank appears to be moving away from its easing cycle. In turn, we should see the rebound from 10,469 gather pace over the remainder of the week, and currency traders may turn increasingly bullish against the USD should we see a growing number of Fed officials strike an improved outlook for the world’s largest economy.

Forex_USDOLLAR_to_Benefit_from_Fed_Exit_Strategy-_Higher_High_on_Tap_body_ScreenShot071.png, USDOLLAR to Benefit from Fed Exit Strategy- Higher High on Tap

With all the headlines highlighting a reduction in the Fed’s quantitative easing program, the FOMC may use this opportunity to outline a more detailed exit strategy, and the central bank may sound more upbeat this time around as it anticipates a stronger recovery in the second-half of the year. Rather than outlining a timeframe to taper its asset-purchase program, the central bank may lay out a tentative amount to reduce the $85B monthly purchases at different intervals, and the shift in the policy outlook may spark a more meaningful run at the 10,900 handle as market participants scale back bets for additional monetary support. In turn, we may see the rebound in the USDOLLAR turn into a more meaningful rally in the coming days, and we will look for a higher high in the index as the bullish trend continues to take shape.

Forex_USDOLLAR_to_Benefit_from_Fed_Exit_Strategy-_Higher_High_on_Tap_body_ScreenShot072.png, USDOLLAR to Benefit from Fed Exit Strategy- Higher High on Tap

All four components strengthen against the greenback, led by a 0.46 percent advance in the Australian dollar, but the higher-yielding currency remains poised to face additional headwinds over the near to medium-term as the policy outlook continues to point to another rate cut from the Reserve Bank of Australia (RBA). As headlines coming out of China – Australia’s largest trading partner – continues to highlight the risk of seeing a ‘hard-landing,’ central bank Governor Glenn Stevens may look to further insulate the $1T economy, and we should see the RBA continue to embark on its easing cycle over the coming months in order to encourage a stronger recovery. Although the AUDUSD looks poised for a large rebound, we may see a muted correction in the exchange rate as interest rate expectations remain tilted to the downside, and the bearish trend dating back to 2011 should continue to take shape as the fundamental outlook for the region remains weak.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. 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.

DISCLOSURES