US Dollar Rally Stutters, Technical Support Nears
US Dollar Talking Points:
- US Dollar Basket (DXY) nears technical support.
- The US economy is strong but faces headwinds next year.
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US Dollar (DXY) Taking a Breather Before Resuming the Uptrend
The US dollar has come back off its best levels of late but remains in a bullish uptrend and is expected to move higher in the short-term. Commentary late Wednesday from Fed Chair Jerome Powell is likely to boost the greenback. Powell reiterated that the US economy remains strong and that the Fed will continue to hike interest rates. He added that the central bank’s goal was to extend the recovery, expand the economy and to keep inflation and unemployment low. Powell also reiterated that all eight Fed meetings in 2019 were ‘live’ instead of the current four times a year and that the markets were going to have to factor that in.
Ahead, a raft of US economic data including retail sales and initial jobless claims.
The US dollar basket (DXY) is nearing a cluster of short-term support which looks likely to hold in the current market set-up. Last Friday’s low at 96.12 is followed by the 20-day moving average at 96.24. A bearish ‘spinning top’ candle made on Tuesday should be noted and may keep downside pressure of the USD. The uptrend from late September remains in place and DXY currently trades above all three moving averages.
US Dollar (DXY) Daily Price Chart May – November 15, 2018
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--- Written by Nick Cawley, Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.