26 Sep 2013
The DXY’s 3-day levitation act ended Wednesday; lower target of 79.93 now in play
FXstreet.com (Barcelona) - The “risk-off” trade was still in play Wednesday – it’s just that the greenback was lumped in with the risk assets instead of the safety assets for the first time in several sessions. The DXY now looks poised to test downside targets instead of upside resistance thresholds.
British and US data along with more D.C. misery likely to influence DXY Thursday
Wednesday’s data flow (in-line or better on German Consumer Confidence, US Durable Goods and new home sales) should have meant net-neutral action in the US Dollar index all other things being equal. Unfortunately for DXY bulls, the FOMC and the political climate in Washington is beginning to take its toll on market conditions and is forcing Treasury yields lower – taking the DXY right along with them now. It’s only logical – given the choice between the greenback and the Yen in this “risk-off” environment, go with the one that is not going to be victimized by the FOMC’s actions and/or chatter.
Thursday, British and US GDP figures will be released along with pending home sales figures. That data along with the continuing influences of QE3 and the US budget battle will drive the DXY.
Technical outlook for DXY
Technicians say the DXY’s upside correction apparently topped out at approximately 80.63 early Wednesday. The sell-off since that peak, they note, should be paart of the new bearish primary trend lower. The downside target for this next move lower is at least 79.93 and possibly 79.62.
British and US data along with more D.C. misery likely to influence DXY Thursday
Wednesday’s data flow (in-line or better on German Consumer Confidence, US Durable Goods and new home sales) should have meant net-neutral action in the US Dollar index all other things being equal. Unfortunately for DXY bulls, the FOMC and the political climate in Washington is beginning to take its toll on market conditions and is forcing Treasury yields lower – taking the DXY right along with them now. It’s only logical – given the choice between the greenback and the Yen in this “risk-off” environment, go with the one that is not going to be victimized by the FOMC’s actions and/or chatter.
Thursday, British and US GDP figures will be released along with pending home sales figures. That data along with the continuing influences of QE3 and the US budget battle will drive the DXY.
Technical outlook for DXY
Technicians say the DXY’s upside correction apparently topped out at approximately 80.63 early Wednesday. The sell-off since that peak, they note, should be paart of the new bearish primary trend lower. The downside target for this next move lower is at least 79.93 and possibly 79.62.