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The US Dollar Is Dangerously Close to a Breakout

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The US Dollar Is Dangerously Close to a Breakout

Postby ritcha on 23 Mar 2020, 09:15

The US dollar, against a basket of currencies, went from a loss of 3.5% for March last Monday to showing a nearly 5% monthly gain at one point yesterday. With the dollar index (DXY) pulling back from some major resistance, the question at this stage is, will it break out?The resistance level in DXY that has caused the turn lower since the start of Asian trading on Friday falls at 103.00 and was responsible for triggering a turn lower at the start of 2017. This turn ended up evolving into a 13-month downtrend for a loss of 15%.The monthly chart shows that the dollar has been in an uptrend since 2008. A bullish continuation would not be surprising. Although a few analysts have argued against further gains in the dollar. One theory has been that the dollar might mean-revert, which is all too common in the FX markets. A great example of mean reversion can be seen in EUR/USD which has been unable to trade in a sustained trend after the initial fall in the first half of 2018.The main argument against this, however, is that there is a catalyst in place at this time.The Coronavirus has led to a sharp sell-off in the equity markets. Initially, investors rushed to safe-haven assets such as gold and the Japanese yen. This is no longer the case.Read more >>slotxo
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