Dollar Soars As War Rages & Oil Spikes
Dollar Rally Continues
The US Dollar is ending the week firmly higher, with the DXY now trading its highest level since November last year. The move comes in response to the rising oil prices we’re seeing as the conflict with Iran. Crude futures are almost back at $100 p/b today after a fresh surge higher yesterday. Heavy disruption in the Strait of Hormuz and no sign that the conflict between the US/Israel and Iran will end soon has seen traders shrugging off the emergency reserve release announced by the IEA this week. With energy prices soaring, inflationary pressures are expected to build in coming months, keeping the Fed sidelined and USD poised for further upside accordingly. Alongside the safe-haven demand we’re seeing for the Dollar in response to the war, this creates a firmly bullish backdrop for the Dollar which is having visible effects across markets today.
US Data On Watch
Away from the war in the Middle East, traders will today be looking to the latest US data with the core PCE reading due this afternoon. If a fresh rise in the data is seen, this should feed into the hawkish repricing of the market’s Fed outlook, pushing USD higher again. We also have prelim Q/Q GDP, durable goods and the JOLTS jobs number to watch today. As such, plenty of room for the USD to rally in response to any hawkish data.
Technical Views
DXY
The index is now once again testing the upper limit of the 96.63 – 100.36 range which has framed price action since May last year. With momentum studies bullish, focus is on a fresh push higher here with 101.91 the next bull target if current resistance breaks. To the downside, 99.15 and 98.24 remain the key support levels to watch.
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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.