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
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
Bullish
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
Wall Street
Bullish
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
Mixed
GBP/USD
Mixed
USD/JPY
Bullish
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
More View more
Real Time News
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.28% 🇪🇺EUR: 0.14% 🇦🇺AUD: 0.12% 🇬🇧GBP: 0.07% 🇳🇿NZD: -0.06% 🇨🇦CAD: -0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/4JS19zN9h3
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: US 500: 0.04% Wall Street: -0.05% FTSE 100: -1.04% France 40: -1.29% Germany 30: -1.41% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/KJYkjRqknS
  • USD/ZAR: A rally from here could be an important tell as to whether the level seen as support previously (17.76) will turn into a point of resistance for sellers to lean against. Get your $USDZAR technical analysis from @PaulRobinsonFX here:https://t.co/TNsQ4JJu6E https://t.co/GMxZj0n8XP
  • Emerging market currencies haven’t been treated equally by the effects of global contagion, even if most have suffered to some degree. However withdrawal of investment flows could hit them all. Get your market update from @DavidCottleFX here:https://t.co/QzNoNYgMgP https://t.co/j71z9WYeBm
  • My trading video for today: "S&P 500 and $AUDUSD Await Trump China Presser, $EURJPY Climbs on Stimulus" https://www.dailyfx.com/forex/video/daily_news_report/2020/05/29/SP-500-and-AUDUSD-Await-Trump-Statement-EURJPY-Climbs-on-Stimulus.html?ref-author=Kicklighter&QPID=917719&CHID=9
  • Wall Street Futures Update S&P 500: -0.21% Dow Jones: -0.30% NASDAQ 100: -0.12% (delayed) - BBG
  • The US Dollar could rise against #ASEAN currencies such as the Singapore Dollar as US-China tensions seem to escalate. The Indian Rupee is also looking ahead of local 1Q GDP data.Get your market update from @ddubrovskyFX here:https://t.co/LkEFJViPWY https://t.co/I2HhrD40vi
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Silver: 0.33% Gold: 0.12% Oil - US Crude: -1.21% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/3wq4zdqxfp
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.22% 🇨🇭CHF: 0.07% 🇪🇺EUR: 0.05% 🇦🇺AUD: -0.08% 🇨🇦CAD: -0.11% 🇳🇿NZD: -0.26% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/XQf8MSJFP6
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.13%, while traders in US 500 are at opposite extremes with 79.44%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/qNiQK9ANUG
US Dollar Index Rate Forecast: Hedge Funds Fight Recent Drop

US Dollar Index Rate Forecast: Hedge Funds Fight Recent Drop

2018-01-04 21:15:00
Tyler Yell, CMT, Currency Strategist
Share:

US Dollar Index (DXY) Talking Points:

  • US Dollar Index Technical Analysis: Failure to break above 94.20 in Dec. would be worrisome
  • Fear of broad drop to close out the year would heighten on break and close below 92.50
  • Trader Sentiment Highlight from IG UK: EUR/USD bearish bias from retail weakens

The US Dollar surprised Global Markets in December by bucking an 11-year trend and a hearty 2017 forecast that anticipated gains. Over the last 11-years, the US Dollar has gained in December and 13-months ago, institutions were nearly as confident as they get in anticipating further EUR strength and out of the gate, they looked right. The 9% drop over 2017 for the DXY does seem overdone, and some traders are not sure it will last.

Hedge Funds Attempt to Buy Low

A development worth noting though not a guarantee of gains is that hedge funds have noticed the ‘cheap dollar.’ A look at the number of net speculative institutional bets shows one of the largest divergences between the spot dollar index in at least a year.

Traders should note that hedge funds do not have a flawless record. However, the message behind the numbers is that they see a deal on a potentially oversold USD. The divergence of positioning could lead to one of two likely outcomes. Either a potential breakout as other market participants see the 2017-year-end as way overdone or a flush out of the new longs who are proven wrong that leads to a strong breakdown that takes the Dollar Index to the 2011 high of 89.61 ( a ~2.5% drop from current levels) or toward 87.25 (a ~5% drop). Trade should also not hold their breath until a break and close above 94.16 develops.

Fed Minutes Fail to Lure Buyers

A few positive developments are that the Fed Minutes released on Wednesday was the evidence that the Fed does not appear concerned about the backdrop of the economy that would warrant a slowdown of hikes. Additionally, the yields of the US Treasury 10-yr Note rose to 2.47% as the odds for a March Fed rate hike rose from 68% to 76% after the minutes.

DXY Technical Update

The technical pictures encourage traders to heed momentum and favor downside for now. The dollar struggles persist, and despite likely being driven by year-end and year-open flows. Short-term resistance is at 92.25/35 (Dec 31 and Jan 3 high) and further at 92.50 (late November low). Below these levels, momentum prevails.

Please add a description for the image.

Chart created by Tyler Yell, CMT. Tweet @ForexYell for comments, questions

Unlock our Q1 forecast to learn what will drive trends for the US Dollar in the new year!

Insight from IG Client Positioning: Pickup in short positioning favors support of price advance

EUR/USD sentiment is analyzed for insight since EUR/USD makes up 57.6% of DXY.

Please add a description for the image.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EURUSD-bullish contrarian trading bias.

---

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell

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

DISCLOSURES

News & Analysis at your fingertips.