US Dollar Q1 Technical Forecast: Fading Excitement Leads to Range as Bulls Shy Away from 98.00
The 96.47 level discussed in last quarter’s technical forecast on the US Dollar remains inplay. This is the 23.6% Fibonacci retracement and this level has now seen multiple support tests as USD bulls have continued to sputter upon tests of fresh yearly highs.
DXY Index Price Chart: 8-Hour Timeframe (September to December 2018)
For the 2019 open, the backdrop may be a bit more accommodating for a return of that prior theme of weakness in the currency. The European Central Bank has just announced an end to their bond buying program, and risk aversion has held through equity markets for the bulk of the quarter, with US stocks working on fresh lows as the end of 2018 nears. This is an environment that can keep FOMC policy in focus as the bank has recently started to slow projections for future rate hikes.
--- Written by James Stanley, Currency Strategist
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