Top Story

Dollar rises to test key levels ahead of US CPI

Today saw the benchmark 10-year US Treasury yield climb above 2.9% for the first time since early 2014. Yet, unlike last week, stocks didn’t respond in a negative way, as the short covering continued after Friday’s turnaround. The dollar was mixed, trading higher against most currencies. Investors have warmed up to the idea that interest rates may have to go up quicker as the Fed attempts to control inflation following the publications of mostly stronger macroeconomic data from the world’s largest economy. The dollar could make a more significant comeback in the event the latest US inflation and retail sales figures, both due for release on Wednesday, come out ahead of expectations. But will that be enough to turn the dollar’s fortunes around? While the greenback may have risen for the past two weeks, this comes on the back of a sustained drop since the start of last year. For the dollar to turn bullish, we will need to see a few things unfold now. First and foremost, the Dollar Index (DXY) will need to go back above the lows of the previous two years, at 91.00 (2017) and 91.92 (2016). Should this happen then there is a good chance the DXY would go on to break above its established bearish trend line that has been in place since the start of 2017. The trend line comes in around this year’s opening price level of 92.28, making it even more important. Meanwhile the next short-term support levels come in at 90.00 and at 89.40. The long-term support level of 88.50 has held after a couple of tests.


Source: eSignal and FOREX.com. Please note, this product is not available to US clients


Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.