Sat, Jan 23, 2021 @ 22:41 GMT
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Euro Reversed Initial Selloff after ECB, Turning the Corner?

Euro has surprisingly ended as the strongest one last week. While a rebound against Dollar was expected, the turnaround against commodity currency, in a risk-on week, was impressive. Though, as discussed below, the common currency still has a lot to prove. Sterling also overwhelmed New Zealand Dollar slightly and...

CFTC Commitments of Traders – Traders Bet on Higher Euro as ECB Shrugged Off its Strength

As suggested in the CFTC Commitments of Traders report in the week ended January 19 NET SHORT of USD Index futures +370 contracts to 14 277. Speculative long positions gained +1 492 contracts, and short positions increased +1 862 contracts. The greenback's correction proves to be short-lived. The ECB...

Janet Yellen’s Dovishness Can’t Push The US Dollar Lower: DXY, EUR/USD

Tomorrow Joe Biden will be inaugurated as President of the United States. However today, former Fed chairman Janet Yellen had her Senate Confirmation hearing to become Treasury Secretary for the Biden administration. During her tenure at as Fed chairman, from 2014 to 2018, Janet Yellen was seen as “more...

Sunset Market Commentary

Markets European traders put comfort from this morning’s constructive Asian sentiment though mood was a little less ebullient. German ZEW investor sentiment beat consensus with the expectations component jumping from 55 to 61.8 in January. The current conditions subseries remains deep in negative territory but surprised on the upside after...

Elliott Wave View: Dollar Index Correction In Progress

Short Term Elliott Wave structure in Dollar Index (DXY) suggests the decline to 89.209 on January 6 low ended wave (3). Wave (4) bounce is currently in progress and the Index shows an incomplete 5 swing sequence from January 6 low, favoring more upside. Internal of wave (4) is...

Dollar and Yen in Driving Seat While Other Markets Turned Mixed

Sterling ended the week as the best performing one. But the late selloff, and rejection by resistance against Dollar and Yen, suggest that the latter too were in the driving seat. Weakness was apparently see in Euro, New Zealand Dollar, and to a lesser extent Australian. Dollar could be...

What Does Biden’s Stimulus Plan Mean for the US Dollar?

On Thursday evening, President-elect Joe Biden unveiled a $1.9 trillion stimulus package to help Americans due to the economic impact of the coronavirus.  The package includes an additional $1400 in direct payment per person, which would result in the $2,000 amount President Trump was asking.  Biden will have an...

US Dollar Volatility (Aided By Powell) Ahead Of Biden’s Stimulus: DXY, USD/CAD, USD/JPY

President-elect Joe Biden will be sworn in on Wednesday as the 46th President of the United States. However, later today he will present his economic stimulus package to help troubled Americans deal with effects of the coronavirus. The plan is said to be in the $1.5-$2 trillion area, with...

US Dollar And Related Pairs At Key Levels Ahead Biden And Powell: DXY, EUR/USD, NZD/USD

The second week of the new year hasn’t been very dramatic, at least for the markets. However, with frightening coronavirus headlines, markets are waiting for tomorrows unveiling of Biden’s economic relief program. Expectations are for “trillions” of dollars in recovery aid. In addition, Powell will be interviewed tomorrow by...

Sunset Market Commentary

Markets Yesterday’s technical equity correction already entered calmer waters today. Economic data was limited to a disappointing but unnoticed US NFIB Small Business Optimism (declined from 101.4 to 95.9 vs. 100.2 expected). European stocks opened in the green but gradually turned marginally negative in most areas as a subdued trading...

Light News Day For The Markets. Will The US Dollar Continue Higher?

There hasn’t been that much news to trade off today, yet the US dollar continues to trade higher. Republicans in the House of Representatives blocked a House resolution which would have called on Vice President Mike Pence to invoke the 25th amendment and remove President Trump from office. However,...

USD Strengthens As US Yields Rise

The USD tended to be on the rise during today’s Asian session against a number of its counterparts as US yields rose over the past few days. The hesitation of the Fed to expand its borrowings, seems to be one of the reasons for the rise of the US...

USD Index Outlook: Dollar Rises Further On Risk Aversion But More Evidence Needed To Signal Reversal

The dollar started trading on Monday with gap-higher and hit 2 ½ week high against the basket of major currencies, signaling and extension of bounce from new 2021 low (the lowest since Apr 2018), posted last Wednesday. The greenback rose almost 1.4% in past three days, lifted by fresh risk...

Dollar Relatively Resilient in Strong Risk-on Market, Setting the Base for a Rebound?

Global investors were all in risk seeking mode in the first full week of 2021. That came despite all the headlines of surges in coronavirus infection and death, return to strict lockdowns, chaos in Washington and Joe Biden's certification as US President-Elect. Dollar didn't perform too well but there...

Dollar Down Trend Continues as DOW Hit Record, Yen Weaker on Yields

Dollar is recovering mildly today but remains one of the weakest for the week, together with Yen and Sterling. Solid risk appetite, with DOW closing strongly at new record overnight, is keeping the greenback and Yen pressured. Yen appears to be slightly weaker with the sharp rally in treasury...

Dollar index continues with down trend after FOMC minutes

Dollar remains generally pressured after FOMC minutes revealed that members unanimously supported keeping asset purchase pace unchanged. The greenback is only partially supported, more notably against Yen by surging treasury yield. Overall, Dollar is still one of the weakest for the week together with Yen and Sterling. "All participants judged...

Dems Win Georgia Senate Elections, What That Means US Dollar And CNH

On Monday, we discussed the potential outcomes of the Georgia Senate races and what it means for the US Dollar. With Democratic candidates Raphael Warncok and Jon Ossoff winning the elections, the Senate is now split 50/50, which means any votes in the Senate that are tied will be...

US Stocks Fall Out Of Bed On First Day Of Year, Pushing US Dollar Higher: S&P 500, GBP/USD, AUD/USD

The US stock market opened the year like a bat out of hell and quickly sold off 120 handles from its all-time highs overnight at 3773.25 to current intraday lows at 3652.50. The S&P 500 is currently holding the upward sloping trendline from back in January 2018, near todays...

Dollar Index Hits New Multi-Year Low, Set for Deeper Fall in Early 2021

The dollar hit new three-year low against the basket of major currencies on Monday, starting trading in 2021 in red, after registering drop of nearly 6.5% in the year 2020. Covid-19 pandemic that devastated the US economy and ultra-low interest rates deflated the greenback, while rising optimism on hopes that...

The COVID-19 Vaccine and Market Implications

As the COVID-19 vaccine is released, life will revert to the “old normal”. However, that doesn’t necessarily mean it will be good for the markets! It has been over a year since the first cases of the COVID-19 were diagnosed in Wuhan, China. As a result of the virus, we...

US Dollar to Weaken Further Gradually in 2021

The DXY index will likely record a -6% fall in 2020, the first decline in 3 years. Although US economic recovery should lend support to the dollar, exceptionally accommodative monetary policy, widening deficit (exacerbated by the new round of fiscal stimulus) and reduced demand for safe-haven asset should keep...

Dollar Resumed Down Trend, Pound Still Awaiting Brexit Trade Talks

Dollar's broad based down trend resumption was a major theme last week. Though, Canadian Dollar was the worst performing one, as it digested recent oil price supported rally. Overall risk appetite, with NASDAQ extending record run, kept Yen and Swiss Franc soft too. As Brexit trade negotiations went into an...

Week Ahead: Holidays Could Lead to Slow, but Volatile, Markets

The end of year holidays arrive this week and that means slow, light trading, unless of course, there is a Brexit trade deal or a US Stimulus agreement.  If one, or both, of these issues are resolved within the next two weeks, markets could be in for a hectic...

Dollar Extends Fall after FOMC, BoE and SNB Next

Dollar's decline continues in Asian session today, with mild risk-on markets in the background. FOMC rate decision overnight triggered little reactions in the markets, and the greenback holds on to the near term trajectory. Sterling is currently the strongest one, awaiting BoE rate decision, and more news regarding Brexit...

Dollar index holding on to 90 support, but risks on the downside

Dollar index is still holding on to 90 psychological support for the moment, even though the greenback is trading as the worst performing one for the week. The level coincides with 38.2% projection of 102.99 to 91.71 from 94.30 at 90.00. Though, as EUR/USD has already taken out 1.2177...

Dollar Index Registers its Worst Year Since 2017; Eyes on 90.00 Level

The US dollar index (futures) had one of its worst years since 2017 despite the impressive rally to a 3 ½-year high of 103.79 in March. The index is set to post a yearly loss of around 7.0% and unless the 90.00 barrier puts breaks to the sell-off, the market...

Not All US Dollar Pairs Are Created Equal: DXY, USD/JPY, EUR/USD

Earlier this morning, the US Dollar index shot higher after hitting lows not seen since April 2018 from near 90.40 up to 90.85. Since then, DXY has pulled back 50% of that range. On a 15-minute timeframe, if the US Dollar index holds the 90.63 level, traders will look...

Sterling in Free Fall as No-Deal Brexit Could Become Reality… Soon

Sterling was in free fall last week after both UK and EU admitted that a no-deal Brexit is more likely than not. Negotiation deadline was ended to end of Sunday. Euro and Dollar, followed as the next weakest and focus turned to rally in commodity currencies. In particular, Australian...

USD Index Outlook: Dollar Edges Higher on Fresh Risk Aversion over Brexit Fears, US Stimulus Delay

The dollar regained traction on Friday as rising Brexit worries and signs of further delays of new US fiscal stimulus soured sentiment and prompted traders into safety. The greenback remains in a downtrend since March and hit the lowest since April 2018 last week, with fresh optimism over fading pandemic...

US Dollar Index Holds Support, For Now: DXY, NZD/USD, USD/CAD

The US Dollar Index is bouncing! Yesterday, as we were looking for a possible pullback in EUR/USD ahead of the ECB meeting and EU Summit tomorrow, we noted that the DXY had moved into a support zone between 89.00 and 91.00 and that price was diverging from the RSI....