FXTM information and reviews
OctaFX information and reviews
XM information and reviews
FXCC information and reviews
Libertex information and reviews
FxPro information and reviews

Time to prepare for 100 in the Dollar Index?

27 September 2019

The Greenback is on a tear and the breach above 99 in the Dollar Index makes 100 look very appetizing on the menu. The stunning run of buying momentum in the Dollar from Wednesday continued into yesterday’s session, with a new 2019 high meaning the Dollar Index has now gained 3% year-to-date. 

In the past three months alone, the Greenback has risen 3% and while President Trump is not happy with its valuation, the rally does not look over yet. 

The Euro is on the verge of falling below 1.09 and having lost over 4% already this year, could now be heading towards 1.05 over the final quarter of 2019.  Of course, the Trump Administration is well known for its jawboning to dollar strength and it could threaten to ask the treasury department to intervene in the market, which dilutes the probability of the Dollar Index advancing as high as 102 in Q4. 

It shouldn’t be that much of a surprise that the Greenback remains so favoured by investors. The US economy is growing by at least 2% heading into 2020, while Europe has the clouds of a recession swarming above its head. Brexit and the current shambles of UK politics essentially provide an unmissable signal to stay clear of Pound Sterling for the time being. No imminent indications of a US-China trade deal nearing a long-term resolution point to emerging markets currencies not having an opportunity to shine any time soon.

Gold looks attractive at $1500

The sudden shift in momentum for a stronger Greenback does potentially provide an opportunity for Gold investors to re-enter the market. Barring a  major shock  that the US and China are closing in on a trade agreement, global growth concerns, and world recession fears that have central banks running around in circles to ease monetary policy provide more than enough reason to expect Gold prices to resume their stunning rally of 2019.

Bitcoin drop can extend all the way below $6000 

This week has seen a storm of selling of crypto assets, with Bitcoin losing a further 6% on Thursday alone. The area around $8000 has in the past been looked upon as a buying opportunity, though the technical outlook does not rule out further selling and a move below $7000 for the first time since May is on the cards. 

In the event that selling momentum for Bitcoin reaches a level of ferocity that pushes it below $6000, we expect to see buyers jump into the market and defend this level strongly in the hopes of pushing the price of the asset higher.     

Spectacular month of volatility for Oil not over 

 Potential buyers of Oil will be monitoring headlines closely following comments from Saudi Arabia’s Minister of State for Foreign Affairs, Adel Al Jubeir that all options were open after the drone attack on its oil facilities nearly two weeks ago.  A military response, while still deemed unlikely, holds the potential to shock prices to an extent that provides memories of the recent 20% surge in Oil valuation on September 16. 

It is still hoped that a military escalation following the events in Saudi Arabia will be avoided. Even the US Secretary of State, Mike Pompeo expressed to the United Nations General Assembly this week that the US wanted a “peaceful resolution with the Islamic Republic of Iran” and the Saudi Minister of State for Foreign Affairs also stated “that everybody’s trying to avoid war and trying to avoid escalation”. These comments came off the back of the United Kingdom, France and Germany also supporting the view that Iran is behind the attacks on Saudi Arabia. 

With all of this in mind, expect the price outlook over the immediate term to continue its decline on both the resilience of Saudi Arabia to restore lost production and fears over global economic growth decelerating. 

It was only a week ago that the OECD revised 2019 expectations for global growth to 2.9%, which represents the weakest level of world expansion this decade and when you weigh in the dismal economic releases from the Eurozone economy this week, it does look inevitable that demand forecasts for Oil will be downgraded once again. That’s negative for price sentiment. 

The outlook is that US Crude can fall as low as $54 before the end of September, while Brent Crude can decline to $58.   



The Euro rebounded from the low
The Euro rebounded from the low

After updating its multi-year lows again, the major currency pair rebounded. The current quote for the instrument is 0.9656. Last night, the local interest in risks improved a bit, helping the asset to successfully correct...

29 Sep 2022

Gold Shows Signs of Life, But Heads Towards Another Losing Month
Gold Shows Signs of Life, But Heads Towards Another Losing Month

The precious metal is largely considered as a hedge to inflation, but it has not confirmed this status during the current year. It did kick it off with a rally, but as the Fed begun hiking rates back...

28 Sep 2022

Forex and Cryptocurrencies Forecast for September 26-30, 2022
Forex and Cryptocurrencies Forecast for September 26-30, 2022

Last week, all the attention of the markets was focused on the FOMC meeting of the US Federal Reserve, which took place on September 21. The probability of another rate hike by 75 basis points (bp)...

26 Sep 2022

Trading the SPDR S&P 500 ETF Trust
Trading the SPDR S&P 500 ETF Trust

The Standard & Poor’s (S&P) 500 Index measures the market capitalisation of the top 500 US largest corporations. Many traders and investors use the S&P 500 Index as a benchmark...

23 Sep 2022

Gold pauses as traders await Fed decision
Gold pauses as traders await Fed decision

The anticlimactic performance of gold continues as the prospect of aggressive rate hikes by central banks around the world amid heightened inflationary pressures...

21 Sep 2022

Developing a forex trading plan: All you need to know
Developing a forex trading plan: All you need to know

All forex traders have different backgrounds, market views, risk appetite, thought processes and expectations. Therefore, traders should not just blindly follow what other traders do...

20 Sep 2022

Editors' Picks

HFM information and reviews
IronFX information and reviews
FXCM information and reviews
NordFX information and reviews
Vantage information and reviews
FP Markets information and reviews
FP Markets

© 2006-2022 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.