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
GBP/USD
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
USD/JPY
Bullish
Gold
Bullish
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
Bitcoin
Mixed
More View more
Real Time News
  • #Silver is a precious metal commodity that investors use as an inflation hedge and safe-haven asset. Find out what are some strategies and tips to trade silver here: https://t.co/k4tVcFuwxW #CommoditieswithDailyFX https://t.co/zXCSmH2HLX
  • Markets are trying to maintain a bullish tilt as a new week rolls around, a look ahead at the charts of the #Dow, #DAX, and #FTSE. Get your technical analysis on major world indices from @PaulRobinsonFX here: https://t.co/bYjRDvQsdM https://t.co/mbg0rUbv3K
  • Trade conflict is clearly awful for the broad world economy, but some countries are already benefiting from it. More stand to do so. Spotting them early could be profitable. Get your update on the #tradewar from @DavidCottleFX here: https://t.co/og0VAPAqwm https://t.co/xB8hYUj4OA
  • #Gold prices may suffer if better-than-expected US economic data and progress on US-China trade negotiations cool 2020 Fed rate cuts and alleviate demand for anti-fiat hedges. Get your $XAUUSD market update from @ZabelinDimitri here: https://t.co/3ula2sUpqL $gld https://t.co/2iZwxcm3wP
  • What's the difference between leading and lagging indicators? Find out from @RichardSnowFX here:https://t.co/vGx8HCagF5 https://t.co/KCZ48rDnhy
  • Why financial market traders must monitor both monetary and fiscal policy? Find out from @MartinSEssex here: https://t.co/Fkzk88Y5gm https://t.co/tTXcw1b7Tp
  • RT @dlacalle_IA: ... “Temporary” Fed plans to double repo market intervention to avoid cash crunch https://t.co/j6N3Qmo6HX
  • RT @HeathaT: The @USTradeRep "fact sheet" on the US-China deal is pretty light on details, but if you're looking for something written down…
  • The inside bar pattern occurs regularly within the financial markets. Incorporating the inside bar strategy within a trading system can enhance a trader’s market analysis technique. Find out how you can use it from @WVenketas here: https://t.co/E3EWOYTYNw https://t.co/1H5UASpHb7
  • What is the best time to trade #forex? Find out: https://t.co/M9R46rmPUK #tradingstyle https://t.co/k6z9p9v4nY
‎US Dollar Index (DXY) Forecast: Trump Tweet Takes USD Toward April Low

‎US Dollar Index (DXY) Forecast: Trump Tweet Takes USD Toward April Low

2018-04-16 16:00:00
Tyler Yell, CMT, Currency Strategist
Share:

‎US Dollar Index (DXY) Talking Points:

The FX market came face to face with an uncomfortable dilemma last week. The Federal Reserve’s minutes were unanimously hawkish when looking at the near-term outlook. Typically, this would have been a catalyst enough to lift the US Dollar and see the short-positions covered. Unfortunately, the US 10-year Treasury Note yield at 2.84% remains under the anticipated Federal Reserve terminal rate at 3.375%. In other words, either the global forces that direct the US 10-year need to adjust or the Fed does.

This morning’s tweet from President Trump displayed his apparent dissatisfaction with the current levels of the US Dollar despite it sitting near the lowest levels on a broad trade-weighted basis since 2015. Either way, Trump’s ability to appoint created vacancies of the Fed could further push the upcoming rhetoric more dovish down the road though this view is speculative at best.

Positioning Fails To Budge Despite A Hawkish Fed

Please add a description for the image.

Data source: Bloomberg

A look at the net positioning on the ICE DXY shows that institutional funds remain unwilling to be big on the US Dollar moving higher. At the same time, G10 FX Volatility is near the lowest levels of the year according to Deutsche Bank’s Currency Volatility Index. Such low levels tend to ward off dip buyers as trend shocks and reversals are always hard to call, but specifically in low-volatility regimes like we currency see in FX.

The US is Losing The Yield Curve Battle To Germany

Please add a description for the image.

Data source: Bloomberg

A key focus for macro investors has been the ever-flattening US yield curve, which looks to call out the Federal Reserve and their current terminal rate. Looking across the global board, Germany has had a widening 2/10 yield curve though the DE 2-year remains below zero to a tune of 59 basis points to the US’ 237 bps above zero for a spread of 298 bps, the widest on record.

For traders dead set on buying USD, they should likely look to play their downtrodden view against other weak currencies like the Japanese Yen. The yield gap between US and Japan may drag USD/JPY higher as the start of the Japanese fiscal year could encourage renewed capital outflows from Japan and weaken the JPY further.

DXY Technical Update – Daily Chart Shows Price Approaching Breakdown Point

Please add a description for the image.

Chart Source: Pro Real Time with IG UK Price Feed. Created by Tyler Yell, CMT

The indicator that helps traders see where the bearish pressure that currently clouds the DXY could turn to bullish pressure is the Ichimoku Cloud. The lagging line, which acts as a momentum filter favors further weakness and until the lagging line breaks above the cloud and prior price, favoring downside remains my bias and positioning.

Recently, I put together an Ichimoku-focused report that highlighted the US Dollar available here

The US Dollar Index has traded in a word, sideways. The consolidating view would favor eventual continuation of the broader downtrend. This bearish view would only be negated on a close above 90.20, the April opening range high or a break above 90.93.

Until then, the US Dollar short trade appears to have multiple supporting factors that are not diminishing.

Traders not wishing to play the index may want to look at stronger currencies within the G10 right now such as the Canadian Dollar, British Pound, or Euro.

Unlock our Q2 forecast to learn what will drive trends for the US Dollar through 2018!

Insight from IG Client Positioning: Traders are Net-Short Suggesting EURUSD May Rise

‎US Dollar Index (DXY) Forecast: Trump Tweet Takes USD Toward April Low

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

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.

New to FX trading? No worries, we created this guide just for you.

---Written by Tyler Yell, CMT

Tyler Yell is a Chartered Market Technician. Tyler provides Technical analysis that is powered by fundamental factors on key markets as well as t1rading educational resources. Read more of Tyler’s Technical reports via his bio page.

Communicate with Tyler and have your shout below by posting in the comments area. Feel free to include your market views as well.

Discuss this market with Tyler in the live webinar, FX Closing Bell, Weekdays Monday-Thursday at 3 pm ET.

Talk markets on twitter @ForexYell

Join Tyler’s distribution list.

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

DISCLOSURES

News & Analysis at your fingertips.