US DOLLAR OUTLOOK: DELTA VARIANT CONCERNS FADE, RISKS USD WEAKNESSUS Greenback worth motion strengthened in opposition to most FX friends througho
US DOLLAR OUTLOOK: DELTA VARIANT CONCERNS FADE, RISKS USD WEAKNESS
US Greenback worth motion strengthened in opposition to most FX friends throughout Tuesday’s buying and selling session and left the broader DXY Index 0.15% larger on steadiness. USD/JPY superior as EUR/USD and GBP/USD worth motion prolonged decrease whereas the US Greenback weakened versus the Loonie. USD/CAD dropped over 100-pips from its intraday excessive, although at solely a 9.1% weighting of the whole DXY Index, this did little to offset US Greenback positive factors.
The DXY Index now trades across the 92.95-price degree after briefly piercing the 93.00-handle earlier tin the session. That stated, and as mentioned in my prior be aware, US Greenback bulls might search to press onward with technical resistance across the 92.80-price degree now within the rearview mirror. I stay a bit doubtful of current US Greenback power, nonetheless.
That is contemplating the believable situation the place Fed officers decide to remain cautiously dovish and delay tapering as a consequence of perceived dangers from the delta variant of covid-19. To not point out, with vaccines doing their job of preserving covid-related hospitalizations and deaths fairly low relative to the variety of new infections, danger developments might stay typically favorable.
DXY INDEX – US DOLLAR PRICE CHART: WEEKLY TIME FRAME (NOVEMBER 2019 TO JULY 2021)
Chart by @RichDvorakFX created utilizing TradingView
Which may put downward strain on the DXY Index because the safe-haven attraction of the US Greenback is diminished. Nonetheless, the technical backdrop paints a brighter image for US Greenback outlook. The DXY Index appears to have damaged out above the neckline of its inverse head and shoulder bottoming sample. It could be prudent to attend for affirmation, although, with year-to-date highs a mere stone’s throw away.
This brings to focus potential for a double prime chart sample with the Bollinger Band additionally possible capping advances. US Greenback bears fading current power might see technical help across the 91.75-price degree come into play. However, taking out technical resistance posed by the 93.45-price degree might see the DXY Index rally to the 38.2% Fibonacci retracement earlier than the 96.00-handle is taken into account.
Maintain Studying – Gold, Silver Worth Pullback May Present Enticing Alternatives in Q3
— Written by Wealthy Dvorak, Analyst for DailyFX.com
Join with @RichDvorakFX on Twitter for real-time market perception
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