All year the USD has threatened to break down on fundamentals and geo-politics, yet the technical trends have won out. DXY threatened to punch through 94 and then 96 has come and gone constantly as the EUR, JPY and EM FX slide. It has been a constant irritation of the President and one that looks to have finally feasted into a full blow boil and seen him accuse nations of currency manipulation. A theme that will only increase into 2020 as we approach the Presidential election.
Then there is the Macro and the growing divergence in data between the globe and the US. Global data stabilisation is beginning. Over half of manufacturing PMIs ex-US has ticked up in November, the highlight being China with Caixin and State manufacturing PMIs rebounding. Trade activity is showing signs it has bottomed while credit growth ex-US is rising at the fastest pace in 36months.
The US on the other hand, has seen its most important data miss expectations. ISMs, ADP employment, and construction spending. The most worrying of all was the readings in the ISM non-manufacturing business activity index which registered a nine-year low. The private payroll growth was also weak. The switch is coming, and although this has been a gradual shift the signs on a macro level are a USD-weakness theme.
However technically DXY and USD major pairs remain in positive momentum.
It looks like it could test the ascending channel, however the sell-off does suggest it could be oversold and some buyers will come in. However, it is well below the 50-day moving average and a break down here could sign a double blessed situation of the fundamentals and techincals aligning.
This material on this website is intended for illustrative purposes and general information only. It does not constitute financial advice nor does it take into account your investment objectives, financial situation or particular needs. Commission, interest, platform fees, dividends, variation margin and other fees and charges may apply to financial products or services available from FP Markets. The information in this website has been prepared without taking into account your personal objectives, financial situation or needs. You should consider the information in light of your objectives, financial situation and needs before making any decision about whether to acquire or dispose of any financial product. Contracts for Difference (CFDs) are derivatives and can be risky; losses can exceed your initial payment and you must be able to meet all margin calls as soon as they are made. When trading CFDs you do not own or have any rights to the CFDs underlying assets.
FP Markets recommends that you seek independent advice from an appropriately qualified person before deciding to invest in or dispose of a derivative. A Product Disclosure Statement for each of the financial products is available from FP Markets can be obtained either from this website or on request from our offices and should be considered before entering into transactions with us. First Prudential Markets Pty Ltd (ABN 16 112 600 281, AFS Licence No. 286354).
Recommended Content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Bitcoin price extends retreat from $69K as old whales shift their holdings to new whales
Bitcoin price continues to move further away from the $69,000 threshold, gaining ground as BTC bulls hope for a retest of the $73,777 peak. This is because of the general assumption that clearing this blockade would set the tone for a reach higher, marking a new all-time high.
Bears have been standing before a steamroller so far this year
Despite a pushback on rate cuts from Christopher Waller, and what was supposed to be cautious trading sentiment ahead of critical US inflation data released later on Friday, the S&P 500 rose on Thursday, marking its best first-quarter performance in five years.