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Climb in USD Price Losing Momentum

Climb in USD Price Losing Momentum

2018-09-06 08:00:00
Martin Essex, MSTA, Analyst
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USD price, news and analysis:

  • The ascent in the US Dollar Index (DXY) looks to be stalling despite persistent worries about global trade, weak emerging markets and the NAFTA talks between the US and Canada.
  • However, it could well move ahead again as “risk off” sentiment remains the driving market force.

Our trading forecasts for Q3 have been published; you can find the USD guide here.

And check out the IG Client Sentiment data to help you trade profitably.

USD Index price pauses for breath

The seemingly inexorable rise in the US Dollar looks to be running out of steam despite continuing market concerns about the US-China trade talks, discussions on a revamped North American Free Trade Agreement (NAFTA) and emerging-market chaos.

However, while USD remains the go-to currency when market sentiment is poor, it will likely resume its ascent after a possible period of consolidation.

USD Index (DXY) Price Chart, Daily Timeframe (June 4 – September 6, 2018)

Latest USD index price chart.

Source: Investing.com

In the news, traders are waiting to hear about a possible escalation of the US-China trade war as a public consultation period on the US administration’s intent to impose tariffs on an additional $200 billion of Chinese goods ends today.

In addition, news is awaited from US-Canada talks on a revamped NAFTA while financial turmoil in Argentina and Turkey remains a worry, as do figures released Thursday showing an unexpected fall in German industrial orders in July.

However, the advance in DXY since a low of 94.43 on August 28 to above 95 currently looks set to resume soon after five days of consolidation. Moreover, trader sentiment data are flashing bearish signals on EURUSD and GBPUSD. The Euro is the principal component of DXY and GBP continues to suffer from a perceived lack of progress so far in the Brexit negotiations between the EU and the UK.

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--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

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

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