News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePT7Yu8 https://t.co/GFx3b1W0OD
  • RBNZ's Hawkesby talking "considered steps" when setting monetary policy, leaning towards 25bps - With money markets pricing in 31bps worth of tightening at the October meeting. Room for disappointment. https://t.co/C7DHnPIeuU https://t.co/K2835aP57Z
  • Gold has plunged nearly 5% off the Monthly high with the sell-off now probing key weekly support here at 1738/47- looking for a pivot here with the Fed interest rate decision on tap. Get your $XAUUSD market update from @MBForex here:https://t.co/Vnxi4143uT https://t.co/zTpqrFIZfk
  • RBNZ: - We have benefitted from a robust rebound in China, our main trading partner - The interruption to the economy's supply side has lasted longer than expected
  • RBNZ: - Vaccination program has aided a stronger-than-expected rebound in the global economy - Demand for our exports has fared better than previous recessions
  • Between the volatile risk trend picture at the moment along with the Fed rate decision and expected 100bp hike from the Brazilian central bank both on Wednesday, $USDBRL is going to be a very interesting pair to watch...
  • RT @EricBalchunas: $SPY traded more than the Top 5 stocks combined. Just when you think $SPY is fading away like an aging legend you realiz…
  • Bitcoin sharply lower on the day, but well off session lows around $42,500 $BTCUSD #Bitcoin https://t.co/mPiZMs8eYH
  • You know what index didn't suffer an overtly threatening reversal this past session? The Russell 2000. It didn't continue the same steady climb through 2021 that the Dow, SPX and Nasdaq enjoyed; so not as much excess premium https://t.co/ieHojAC7b5
  • USD/JPY extends the rebound from the weekly low (109.11) as the stronger-than-expected US Retail Sales report fuels speculation for an imminent shift in monetary policy. Get your $USDJPY market update from @DavidJSong here:https://t.co/Rozq62yAou https://t.co/toaAHiCavK
US Dollar Index, EUR/USD Charts & More

US Dollar Index, EUR/USD Charts & More

Paul Robinson, Strategist

Technical Outlook:

  • US Dollar Index volatility to give-way to a trend
  • EUR/USD could test a multi-decade trend-line soon

The US Dollar index has been swinging around rather violently since the coronavirus gripped financial markets. Unlike stocks, bonds, and economically sensitive commodities there hasn’t been a clear sustainable trend. The sharp decline, rally, then sharp decline again since late February has forced traders to make fast trading decisions. That is anticipated to give-way to a sustainable trend, but which way will that be? The broader trend has been upward, and the most powerful portion of those swings was to the upside. Risk is thus skewed at this time towards seeing stabilization that results in a move higher. This may take a little time to work itself out, but soon one way or the other we should have something more concrete to work with.

US Dollar Index Daily Chart (swings to settle)

US Dollar Index daily chart

US Dollar Index Chart by TradingView

EUR/USD is about 57% of the USD index, and as such it is the primary driver. It won’t take much more of a downturn to put the Euro back on a trend-line that extends higher from the early 1980s, if you take into consideration the currencies that were folded into the single-currency. Below you can see it back to 2000, which even on its own makes it an impressive long-term threshold. It was briefly breached during the recent sell-off, but held on a monthly basis. It’s support until it breaks, but if it does it could send EUR/USD much lower, and conversely the DXY much higher.

EUR/USD Monthly Chart (major long-term support)

EUR/USD monthly chart

EUR/USD Chart by TradingView

For all the charts we looked at, check out the video above…

Resources for Index & Commodity Traders

Whether you are a new or an experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, and trading guides to help you improve trading performance.

We also have a series of guides for those looking to trade specific markets, such as the S&P 500, Dow, DAX, gold, silver, crude oil, and copper.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

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

DISCLOSURES