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
EUR/USD
Mixed
Oil - US Crude
Bullish
Wall Street
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
Gold
Bullish
GBP/USD
Mixed
USD/JPY
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
More View more
Real Time News
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/POsnWwTmER
  • Speculative stubbornness continues to hold back emergent fears like inflation and central bank moderation, but no certain of progress on that battle this week. While $NDX, $BTCUSD and Pound are on my radar, #Dollar tops my watch list: https://www.dailyfx.com/forex/video/daily_news_report/2021/05/15/Dollar-Outlook-Throttled-by-Both-Risk-Rebound-and-Curbed-Inflation-Concerns.html https://t.co/aYjyvQzhIA
  • AUD/USD remains range-bound but trend potential exists elsewhere in pairs such as AUD/JPY or AUD/CAD. Get your market update from @JStanleyFX here: https://t.co/bppORO1NEg https://t.co/6mXqAOrl9H
  • What are some technical and fundamental factors affecting the equities market? Get your free forecast here: https://t.co/YQG1aaIT8C #DailyFXGuides https://t.co/oOyN7fUaC6
  • The Federal Open Market Committee (FOMC) Minutes may drag on the price of gold as the central bank appears to be in no rush to switch gears. Get your market update from @DavidJSong here: https://t.co/2EvNplObIk https://t.co/hhEAnqhAEu
  • There’s a strong correlation between interest rates and forex trading. Forex is ruled by many variables, but the interest rate of the currency is the fundamental factor that prevails above them all. Learn how interest rates impact currency markets here: https://t.co/J0EPMD2Cfi https://t.co/gNiVpWrd1p
  • 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/4zEwS7mFJE
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/nB2f5m56nq
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/Q0yRRpMpPX
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here: https://t.co/eILWbFgHRE https://t.co/pSeSiNnmHe
USD Forecast: US Dollar Turns to Retail Sales Data Post-Trade Deal

USD Forecast: US Dollar Turns to Retail Sales Data Post-Trade Deal

Rich Dvorak, Analyst

USD FORECAST: US DOLLAR EYES DECEMBER ADVANCED RETAIL SALES DATA DUE FOR RELEASE FOLLOWING TRUMP TRADE DEAL SIGNING CEREMONY WITH CHINA

  • USD prices drifted to the downside during Wednesday’s session while risk assets soared as markets rejoiced the US-China trade agreement signing ceremony
  • The US Dollar could remain under pressure owing to the lack of safe-haven demand with trade relations between Washington and Beijing growing brighter with their phase one trade deal
  • The Fed keeping its printing press greased up and running could keep weighing negatively on the US Dollar, but advanced retail sales data expected Thursday could strongarm USD price action

USD prices came under pressure throughout Wednesday’s trading session which pushed the DXY Index – a popular benchmark of major currency pairs reflecting broader performance in the US Dollar – approximately 0.15% lower to the 97.25 mark.

One possible explanation for weakness in USD price action could be the absence of demand for safe-haven currencies like the US Dollar, which likely results from an abundance of risk appetite stemming from President Trump’s official signing ceremony of his phase one trade agreement brokered with China.

US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (JUNE 2019 TO JANUARY 2020)

USD Price Chart US Dollar Forecast DXY Index Technical Analysis

Chart created by @RichDvorakFX with TradingView

From a technical perspective, another rejection at confluent resistance near the 97.50 price level – underscored by the 50-day simple moving average the 38.2% Fibonacci retracement of the October 03 swing high recorded by the US Dollar Index – can also explain weakness in USD price action.

The US Dollar is now testing technical support potentially provided by its 20-day simple moving average and 23.6% Fibonacci retracement level, which rest slightly above the 97.00 handle. Potential for further downside in USD prices and retest of the December 31 swing low is noteworthy if the aforementioned area of technical support fails to keep the US Dollar afloat.

Shifting gears to focus on fundamental catalysts that may steer the general direction of USD price action, we find that the latest release of US advanced retail sales data is expected to cross the wires Thursday, January 16 at 13:30 GMT. A detailed list of scheduled data releases and event risk that impact the US Dollar can be found at the DailyFX Economic Calendar.

CHART OF US ADVANCED RETAIL SALES HISTORICAL DATA (JUNE 2015 TO DECEMBER 2019)

US Advanced Retail Sales Chart Historical Data

The US retail sales report could send USD rates spiraling lower if the data reveals that American consumers were feeling stingy this holiday shopping season and decided not to spend big. This is because the strength of the US economy is determined overwhelmingly by personal consumption expenditures.

Sustained sluggishness in retail sales growth might raise a red flag at the Federal Reserve and prompt forex traders to ramp up expectations for further accommodation from the FOMC. The US Dollar would likely be dragged lower in turn.

Another fundamental force dragging USD price action lower could be the persistence of daily liquidity injections from the Fed via its repo operations, which has inflated the central bank’s balance sheet by an alarming $400 billion since this past September.

Correspondingly, this increases the supply of USD circulating the financial system and could have, in part, contributed to the US Dollar Index’s 2.5% drift lower from last year’s peak. On that note, the New York Fed announced yesterday that it intends to keep the easy-money printing press on according to its latest repo operations schedule.

Specifically, the FOMC will continue to conduct overnight repo operations every business day with an aggregate limit of $120 billion until mid-February, which is in addition to 14-day term repos offered twice a week with an aggregate limit of $35 billion through month-end and $30 billion through next month.

Keep Reading – US Dollar Forecast: USD Charts & Levels to Watch This Week

-- 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