USD Stalls At Highs
The US Dollar is on course to post its first losing week in seven weeks today. Mixed data over the week has diluted the recent bull sentiment which had been driving the market higher. Some undershooting in inflation data and softer retail sales readings have seen front-end Fed rate cut pricing creeping higher with traders now pricing a roughly 35% chance of a cut in March and over a 50% chance in May. USD has previously been rallying firmly, bolstered by a bumper set of US jobs data which had fuelled a scaling back of rate-cut expectations. However, in light of this recent data, traders are sensing the risk that a could still a materialise in coming months depending on how data develops in that time.
Trump & USD
Looking ahead, the big focus for the Dollar near-term is Trump’s return to office next week. Given the noise we’ve heard around trade tariffs and trade restrictions, there is a lot of volatility risk seen next week though USD looks likely to benefit near-term, from a safe-haven standpoint at the very least. Trump’s protectionist and pro-growth policies are expected to favour USD with upside inflation risks seen adding to bullish sentiment. Against this backdrop, USD could well see a fresh topside run next week particularly fi Trump makes any unexpected policy moves, adding to uncertainty as he return to power.
Technical Views
DXY
The rally in DXY has stalled for now into the 109.35 level. However, with price still in the bull channel, the focus is on a continuation higher and a breakout towards the 110.86 level next. Downside, 107.25 remains key support to watch.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.