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DailyFX US AM Digest: US Dollar at Three Year Low versus the Euro

DailyFX US AM Digest: US Dollar at Three Year Low versus the Euro

Research, Research Team


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The US Dollar (via DXY Index) swung to fresh yearly lows and back to its lowest level since September 8 – the day the 2017 low was set – following news that German Chancellor Angela Merkel would be able to form a coalition government. The stalemate has persisted since September, with the breakthrough yielding a push higher by EUR/USD to its strongest level in three years. General US Dollar weakness has seen GBP/USD push to a fresh yearly high and USD/JPY drop to a fresh yearly low.

DailyFX Economic Calendar: Friday, January 12, 2018 – North American Releases

The busiest day on the DailyFX Economic Calendar this week has thus far yielded disappointing results for the US Dollar. With headline CPI meeting expectations, core CPI still below +2% y/y, and Retail Sales falling short of estimates, the US Dollar remained near its daily lows (via DXY Index). An update to the Atlanta Fed GDPNow Q4’17 growth forecast is due later today. The prior update from January 10 was the US economy growing at +2.8% last quarter.

DailyFX Webinar Calendar: Monday, January 15, 2018

IG Client Sentiment Index Chart of the Day: Spot Gold

Learn more about the IG Client Sentiment Index on the DailyFX Sentiment page

Spot Gold: Retail trader data shows 66.8% of traders are net-long with the ratio of traders long to short at 2.01 to 1. The percentage of traders net-long is now its highest since Jan 04 when it traded near 1320.73. The number of traders net-long is 2.0% higher than yesterday and 7.6% higher from last week, while the number of traders net-short is 3.8% lower than yesterday and 7.1% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Spot Gold-bearish contrarian trading bias.

Five Things Traders are Reading

  1. “DXY Index Eyes 2017 Low as EUR/USD Hits Three-year High” by Christopher Vecchio, CFA, Senior Currency Strategist
  2. “Technical Outlook for USD, Euro, USD/ZAR, Gold/Silver & More” by Paul Robinson, Market Analyst
  3. “EUR/USD Soars to a Three-Year High on German Coalition Breakthrough” by Nick Cawley, Analyst
  4. “S&P 500 Trading Outlook: Hard to Buy, Even Harder to Short” by Paul Robinson, Market Analyst
  5. “Most Asian Stocks Manage Modest Gains, US Dollar Pressured” by David Cottle, Analyst

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