DXY inter-markets: scope for a test of 102.00
|The US Dollar Index – which tracks the buck vs. its main rivals – has reverted the negative mood that has been prevailing during the first half of the week, managing to retake and advance well above the 101.00 mark for the time being.
The bullish outlook on the buck remains intact and well underpinned by expectations of further tightening by the Federal Reserve (the probability of a rate hike next week is at almost 95% according to CME Group’s FedWatch tool), solid US fundamentals and prospects of higher inflation in the periods to come under Trump’s presidency.
Yields in the US money markets also remain supportive of a stronger USD, with the 10-year benchmark off highs albeit still above the 2.4% mark so far.
Furthermore, the recent dovish guidance delivered by the ECB on Thursday has also contributed, albeit somewhat indirectly, to the case of a higher dollar in the next months.
In the meantime, and on the technical view, further gains appear likely while above the short-term support line off 95.91 (low November 9) currently at 99.73. In addition, initially support emerges in the 99.50/70 band, coincident with the 23.6% of the 2016 up move and this week’s low (December 8). On a longer run, the 7-month support line at 96.30 and the key 200-day sma at 96.22 emerge as a more solid support area.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.