The United States Dollar has been getting hammered for almost all of 2020, the economic dominance that they have held onto for so long is not doing the currency any favors now. One only has to look at a chart of the Dollar index to see its lackluster performance, its even starting to present the early markings of an oversized resistance pattern on a Monthly chart.

You can see pretty clearly while not a perfect resistance pattern and certainly not fully formed, there is the semblances of a double top beginning to form. When it comes to these patterns if I have to look at the chart over and over to really pick it out, then its not the trade I want, I like them clear and obvious. While this one is kind of in between both of those descriptions its also not fully formed.

I’m not into technical indicator’s much but occasionally will have a brief look to satisfy my own curiosity. In this instance I’ve put on a linear weighted 200 moving average nothing fancy!

I could implement trend lines and anything and everything else that might fix the quick itch that I have for technical but it’s pretty obvious, longer-term pain for the US dollar will be coming for years.

The US is going to be operating in a diminished compacity with monstrously sized budgets and trade deficits, an ongoing symptom of the larger issues faced through out 2020. This is just one element of the scaring we are likely to see the for the US economy, with many of the cuts still not identified still.

Its no wonder investors have been seeking alternative havens to park their money in the absence of the US dollar. The question remains though how low can the US Dollar go? Given the potential for enormous fiscal and monetary pump ups, id say much further to come still.

RISK WARNING: Foreign exchange and derivatives trading carry a high level of risk. Before you decide to trade foreign exchange, we encourage you to consider your investment objectives, your risk tolerance and trading experience. It is possible to lose more than your initial investment, so do not invest money you cannot afford to lose。 ACY Securities Pty Ltd (ABN: 80 150 565 781 AFSL: 403863) provides general advice that does not consider your objectives, financial situation or needs. The content of this website must not be construed as personal advice; please seek advice from an independent financial or tax advisor if you have any questions. The FSG and PDS are available upon request or registration. If there is any advice on this site, it is general advice only. ACY Securities Pty Ltd (“ACY AU”) is authorised and regulated by the Australian Securities and Investments Commission (ASIC AFSL:403863). Registered address: Level 18, 799 Pacific Hwy, Chatswood NSW 2067. AFSL is authorised us to provide our services to Australian Residents or Businesses.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD hits fresh one-month low amid souring market mood

EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points. 

EUR/USD News

GBP/USD retreats toward 1.36 amid fresh dollar strength

GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown. 

GBP/USD News

Gold extends sideways grind near $1,850

The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.

Gold news

Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed

Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative. 

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News

Forex Majors

Cryptocurrencies

Signatures