FXTM information and reviews
FXTM
95%
OctaFX information and reviews
OctaFX
94%
XM information and reviews
XM
93%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
91%
HFM information and reviews
HFM
89%

The dollar has fought its way up. The rally is just beginning


19 August 2021

Global equity markets strengthened their decline, and the dollar gained momentum after Fed minutes indicating a readiness to start QE tapering as early as this year. The dollar index rose to its highest level since November 2020, surpassing the reversal levels of July and April, indicating an upward exit from a prolonged consolidation. Historically, the dollar starts to add to its competitors shortly before a rate hike and for some time afterwards.

Dollar index weekly

On average, this rally lasts for two to three quarters. However, the starting point should be June, when the DXY retreated from its local bottom below 90, adding 3.5% since. A breakout of the USDCAD above its 200-day average gives confidence that American investors have definitively chosen the dollar trend. The Canadian dollar has remained under pressure for a while despite rising oil, which shows the strength of forex undercurrents.

We should not be surprised if the impulse of the USD continues and gathers strength even in the first quarter of next year. In 2014, the last time it was in a similar situation, the DXY added 25% before rising sideways. It isn’t easy to expect such movements this time, but a return to the peak values of recent years around 104 should be considered a workable scenario.

EURUSD weekly

For EURUSD, the bullish for the USD scenario opens a direct route to 1.0800-1.0500, where the pair has repeatedly gained support even during periods of high market turbulence in the last seven years. In other words, the downside potential here is 7-10%.

GBPUSD has crossed its line in the sand, confirming its cross below 200-day MA this week, while the 50-day MA has turned into a resistance.

GBPUSD weekly

Interestingly, there are almost no technical obstacles for the GBPUSD to decline to the 1.2000 area, 12% below the current levels. Often the Pound moves with more amplitude than the Euro, proving to be more sensitive to the fluctuations in market sentiment.

AUDUSD weekly

The situation in AUDUSD looks potentially interesting. Since June, the pair has been on a soft landing, but the decline is picking up sharply this week. Rising contagion cases and a tightening lockdown in the country adds to players’ nervousness. Should the pair fall from the current 0.7190 to 0.7000, the sell-off in the Aussie could become particularly fierce, heading the pair towards the 0.6300-0.6600 area.

#source

Share: Tweet this or Share on Facebook


Related

XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP
XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP

Gold price pulls away from a fresh multi-month top amid a modest US Dollar strength. Bets for smaller rate hikes by Federal Reserve, recession fears should help limit losses...

26 Jan 2023

Microsoft: Still Trapped Within Descending Channel
Microsoft: Still Trapped Within Descending Channel

Microsoft Corp., an American multinational technology conglomerate currently ranked the third largest company by market capitalization ($1.728T) which actively engages...

24 Jan 2023

Same story new week
Same story new week

Chinese New Year celebrations – many centres are closed in Asia. Treasuries sagged to end on a bearish week. USDIndex at 101.30 low as the market continued...

23 Jan 2023

EUR is stuck consolidating
EUR is stuck consolidating

EURUSD is going to consolidate. The current quote is 1.0810. In the nearest future the EUR might experience some local pressure because the weather in Europe has changed...

20 Jan 2023

EURGBP Fails To Break 0.89
EURGBP Fails To Break 0.89

In today’s European session, Germany’s final CPI rate for December registered 8.6% on an annual basis, in line with market expectations and the previous value...

18 Jan 2023

XAUUSD: Weekly Review 16-20 January 2023
XAUUSD: Weekly Review 16-20 January 2023

Gold jumped to start 2023 with strong gains, as the positive momentum from December carried over into the new year. Last year’s headwinds, particularly the strengthening...

17 Jan 2023


Editors' Picks

FXCM information and reviews
FXCM
87%
ActivTrades information and reviews
ActivTrades
86%
RoboForex information and reviews
RoboForex
85%
MultiBank Group information and reviews
MultiBank Group
84%
Libertex information and reviews
Libertex
83%
Vantage information and reviews
Vantage
83%

© 2006-2023 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.