After a series of central bank meetings, the foreign exchange market entered a phase of strong consolidation.
The week before last week was marked by the most significant weekly decline in the US dollar index (USDX) for the entire last period of its growth. And this is more than one year.
During the entire last year, investors and speculators bought the US dollar at all its falls and were in profit. Continue reading
The upward trend of the US dollar in recent days has slowed down in its development. Is it just a pause in the foreign exchange market or signs of an approaching reversal?
Over the past few days, the US dollar (USDX) has been consolidating around the level formed by the previous high on the value of 96.836. Continue reading
Trade wars and an endless stream of US sanctions force even America’s close allies to work out measures to protect their own financial systems and business.
The European Commission plans in the near future to submit its proposals for replacing the dollar in European financial transactions. Continue reading
On August 8, 2018, the Bloomberg news agency published a very entertaining material entitled “JPMorgan Says Trump May Sell Dollars as Weapon in U.S. Trade War“. This article (oddly enough) came out on the eve of the fact that the dollar (USDX index) broke through the mirror resistance at 95.00 and left the medium-term consolidation zone. Continue reading
As a result of the rapid growth of the US dollar, the main currency pairs on forex reached key levels.
Exit from the technical figure of the triangle, the breakthrough of the mirror level of 90.850 and the exit from the long-term descending channel led to the rally on the US dollar (USDX).
The upward movement stopped by testing the next strong mirror resistance level at 92.400.
At the same time, the euro reached the level of 1.20, the British pound – 1.36, the Australian dollar fell to the key level of 0.75, the Canadian dollar reached 1.29, and the Japanese yen closely approached the level of 110.00.
The euro after a long consolidation at the perennial highs came down from the long-term rising channel. This was also due to the breakout of the triangle down and the breakdown of key support 1,21550.
Currently, this level is a mirror resistance and with a high probability the euro can test it before continuing its decline.
The fall of the British pound was due to poor economic data and, as a consequence, a decrease in the probability of an increase in the interest rate by the Bank of England. The pound left the growing channel for the first time in a long time and stopped only at a strong mirror support level of about 1.36.
Today, the data on the index of business activity in the construction sector in the UK is expected, but they are unlikely to help reverse the trend to reduce the pound due to extremely bad weather in the reporting period.
The Fed’s decision on the interest rate is expected this evening. Since this meeting will not be accompanied by a press conference, experts do not pawn the possibility of raising rates on it. The main attention will be paid to the accompanying statement to the decision. In the case of a more rigid position of the regulator, one can expect a continuation of the trend towards strengthening the US dollar.
Let me remind you that the latest data on inflation in the US, although it showed a slight slowdown in inflation over the past month, annual inflation reached target 2.0%. This gives all grounds for raising the rate at the next meeting.
Correction on the dollar, which we are observing today, is quite possibly connected with the fixing by the bulls on the dollar of profit in the lead-up to the Fed meeting to reduce risks.