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.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • Tune in to @CVecchioFX 's #webinar at 7:30 AM ET/12:30 PM GMT to prepare for major event risk in the week ahead. Register here: https://t.co/d5MAOTwJAg https://t.co/L9yxAl0DQh
  • Commodities Update: As of 11:00, these are your best and worst performers based on the London trading schedule: Silver: 0.99% Gold: 0.75% Oil - US Crude: -3.27% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/CWSxvMvssa
  • Forex Update: As of 11:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.39% 🇨🇭CHF: 0.20% 🇬🇧GBP: 0.12% 🇨🇦CAD: -0.29% 🇳🇿NZD: -0.66% 🇦🇺AUD: -0.79% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/RfsfqrEjxz
  • RT @Schuldensuehner: Ouch! Ifo casts doubt on German economic turnaround. Business climate fall from Dec and came in at 95.9 below consensu…
  • RT @iv_technicals: $VIX curve now inverted 👀 Here's the 1-week shift: https://t.co/comrpraJUe
  • RT @lisaabramowicz1: Someone seems to be cashing out of high-yield debt in a big way. The $18 billion U.S. high-yield bond ETF $HYG saw its…
  • Natural Gas trading is popular among traders due to its volatility. How can you trade this? Find out here: https://t.co/qbLCv6RP0H https://t.co/4igP9Fq2S7
  • Indices Update: As of 11:00, these are your best and worst performers based on the London trading schedule: Wall Street: -1.66% US 500: -1.67% Germany 30: -2.26% France 40: -2.31% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/mHYe7I3WLO
  • EUR/USD Price: A Decline Then a Possible Correction – Euro vs USD Outlook More details in the link below: https://www.dailyfx.com/forex/technical/home/analysis/eur-usd/2020/01/27/EURUSD-Price-A-Decline-Then-a-Possible-Correction-Euro-vs-USD-Outlook-MK.html?CHID=9&QPID=917714 https://t.co/AGOo5PibPg
  • Tune in to @nickcawley1 's #webinar at 6:30 AM ET/11:30 AM GMT to prepare for key UK events and markets in the week ahead. Register here: https://t.co/xewSeUoDaT https://t.co/ZHX85nxXUu
US DOLLAR Technical Analysis: Is The Dollar Dominance Fading?

US DOLLAR Technical Analysis: Is The Dollar Dominance Fading?

2016-02-25 19:20:00
Tyler Yell, CMT, Currency Strategist
Share:

Talking Points:

  • US Dollar Technical Strategy: US DOLLAR May Retest 11,850
  • Probability of Fed Hike Is Vanishing Alongside US Dollar Bulls
  • Recent Fed Commentary on Uncertainty Pushes Down Treasury Yield & US Dollar

*FED'S WILLIAMS SAYS NEGATIVE RATES `POTENTIALLY IN TOOLBOX.'

The US Dollar has had a February to forget. The US Dollar has had its toughest month since June & April of last year while currencies like the Japanese Yen are having their best month in nearly a decade. An unwind of optimism that is hitting equity markets, and commodity sectors seem to be spreading to the US Dollar and the Federal Reserve’s plans for US interest rates and thereby, the US Dollar. The quote from SF Fed President John Williams at a speech on February 25, which is evidence to market liquidity and overall uncertainty at present.

US Dollar May Have Run Into Long-Term Resistance Again

US DOLLAR Technical Analysis: Is The Dollar Dominance Fading?

The chart above shows a price channel that has framed price relatively well from the 2011 low. Lower. The validity of the price channel can be seen on the snap-back into the price channel in summer of 2014 and the resistance points holding back further price advances in March ’15 and January. Now, price appears to be wallowing as traders are unsure if they should buy more JPY, even in light of negative interest rates or if the British Pound has fallen below fair value and therefore should be bought.

US DOLLAR Technical Analysis: Is The Dollar Dominance Fading?

Interested In our Analyst’s Longer-Term Dollar Outlook? Please sign up for our free dollar guide here.

Key Levels: Watch the 10-Month Trendline

Looking at a more relevant chart for short-term price action, you can see an 11-month price channel that also appears to provide guidance. You can see the late January channel resistance aligns with 127.2% Fibonacci Extension of the April-May range. Since then, we have moved aggressively lower followed by a 50% retracement at 12,154 at present.

We have noted before that the month or February is a seasonally weak month for the US dollar. Whether or not we see, sustained weakness will likely depend on a break below the recent higher low of 12,053. A break and daily close below 12,053 could be the first sign of a further wipe out of recent hard-fought gains in October-January.

Fibonacci expansions provide downside levels. The 61.8% expansion of the early February decline targets 11,970. A further breakdown would turn focus to a level of technical confluence at 11,850. As you can see on the first and second chart, 11,850 would bring us to support, and buyers may jump in to propel us to another leg higher.

A break below 11,850 could argue a larger behavior change is afoot, and US Dollar weakness could become a broader and surprising theme for 2016.

T.Y.

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

DISCLOSURES

News & Analysis at your fingertips.