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US Dollar News: USD Price Nears 2-Year High; Fed Speak, FOMC Minutes Loom

US Dollar News: USD Price Nears 2-Year High; Fed Speak, FOMC Minutes Loom

2019-05-21 11:45:00
Nick Cawley, Analyst
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US Dollar News: USD Price Analysis and Charts.

  • US dollar bullish run continues, threatening recent highs.
  • Fed speak and FOMC minutes may underpin latest up-tick.

DailyFX Q2 Forecasts and Top 2019 Trading Opportunities.

US Dollar News – Federal Reserve Speeches and FOMC Minutes up Next

The US dollar remains in favor with investors as risk sentiment sours on the US-China trade spat, global growth concerns and Brexit, to name just a few market negatives. Further, while the next move in US interest rates is very likely lower, the US dollar still commands a yield premium over a wide range of other currencies, helping to underpin its value. This is reflected on the daily chart with a continuous series of higher highs and higher lows from January 10 this year.

While boosted by risk concerns, the US dollar (DXY) will likely need a fresh stimulus to break above the April 26 high at 97.84, after which the greenback will back at highs seen in May 2017. Over the next two days, five different Federal Reserve members will be speaking, and their remarks will be needed to be monitored closely for any clues as to the strength, or not, of the US economy and the path of potential interest cuts ahead.

US Dollar News: USD Price Nears 2-Year High; Fed Speak, FOMC Minutes Loom

The DailyFX Calendaris a comprehensive guide to all market moving data releases and events.

Later Wednesday, the FOMC minutes from the May 1 meeting will be released and these will be parsed for any further explanation from Chair Powell on how ‘transitory factors’ are keeping US inflation in check. If the Fed believes that inflation in the US is picking-up towards target, any interest-rate cut may be pushed further down the line until price pressures consistently sit near the 2% target.

The US dollar (DXY) chart has enjoyed a positive run later, six green candles out of the last seven disregarding Sunday’s, and trades above all three moving averages. The May 3 sell-off candle’s high at 97.61 is within reach, which would leave the previously mentioned 97.84 as the short-term target if positive momentum continues. The CCI indicator is currently showing the US dollar in overbought territory.

US Dollar (DXY) Daily Price Chart (August 2018 - May 21, 2019)

US Dollar News: USD Price Nears 2-Year High; Fed Speak, FOMC Minutes Loom

IG Client Sentiment data show how retail traders are positioned in a wide range of asset classes and how daily and weekly sentiment changes can help drive momentum.

--- Written by Nick Cawley, Market Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

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