US Dollar Basket (DXY) May Re-Test Recent High
- Bullish engulfing candlestick made yesterday.
- US ISM data and the Non-Farm Payrolls releases this week
- Partial US government shutdown still weighs on the USD.
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US Dollar Basket (DXY) to Brush Aside Asian Sell-Off
The US dollar is looking to re-bound from Wednesday’s Asian sell-off and re-test the 96.59 – 96.60 level last seen mid-December 2018. While US Treasury yields continue to fall due to safe-haven buying, the US currency continues to keep its recent strength, as global equity markets are under-pressure from lofty valuations, missed expectations and global growth fears. Apple has dropped from $232 in early November 2018 to a current quote of $146, while Tesla has fallen from a mid-December level of $376 to around $305. In addition, the partial US government shutdown is not helping sentiment, as US President Donald Trump continues to demand funding for the US/Mexico border wall.
Ahead, important US data releases include US ISM data and the monthly US payroll release (NFPs).
The US Dollar Basket (DXY) daily chart shows a bullish engulfing candle formed yesterday, a positive sign for US dollar bulls. Resistance starts between 96.30 and 96.35, the 20- and 5-day moving average cluster, before the 96.60 double-top made on August 15 and December 26, 2018.
US Dollar Basket (DXY) Daily Price Chart (May 2018 – January 3, 2019)
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What is your view on the US dollar – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.com or via Twitter @nickcawley1.
