USD Index: Bullish momentum is showing signs of exhaustion – SocGen
|The Dollar is struggling to pursue its advance. Economists at Société Générale analyze FX market outlook.
Stronger growth in China enough to guide EUR/USD above 1.0635?
Whether the USD will hold its ground may depend on whether pricing for December FOMC surpasses 50%.
We are closely watching technicals in the DXY as bullish momentum is showing signs of exhaustion and potentially breaking down.
Stronger growth in China is implicitly positive for EUR/USD (trade balance) but is it enough to guide the pair above 1.0635? We have our doubts and ideally would need to see a significant retracement in UST/Bunds, better Eurozone data (weaker US) and narrowing of the XCCY basis. The 10y spread is closing in on 200 bps, not a signal to add Euro longs.
For the 10y UST yield, a shot at 5% depends on whether 4.88% can be overcome.
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.