Market News & Analysis

Top Story

Another look at the US Dollar

With no economic data out from the US today, the markets remain quiet as we await news regarding whether a  Meaningful Vote on Brexit out of the UK could still take place tomorrow.  However, we have the ever-looming US-China trade negotiations where headlines rule, as well as the possibility that the USMCA deal make be voted on as soon as this week.  In addition, later today the market will know the results of the elections in Canada.  Any and all of these can move the US Dollar significantly, so let’s look at where the US Dollar Index and where it could go.

On a weekly timeframe, the DXY has been in a rising wedge since the beginning of 2018.  Last week, price finally broke lower out of the wedge and closed at the weeks low near 97.14.  A retest of the upward sloping trendline of the rising wedge is near 97.60.  The target for the breakdown from the wedge is a 100% retracement of the wedge, which is 88.42, however remember that we are looking at a weekly time frame and that nothing moves in a straight line, so this probably won’t happen quickly.  The first target on the downside is the 38.2% Fibonacci retracement level of the week of Feb 12th, 2018 lows to the week of the September 30th highs at 95.36.

Source: Tradingview, City Index

On a daily timeframe, the index has been in an upward sloping channel since June 2018.  However, since May of this year,  price has been trading in a rising wedge up to the top of the channel, and broke lower out of the wedge on October 15th.  The US Dollar Index has not looked back and is currently trading near the 127.2% Fibonacci extension from the June 25th low to the September 30th high.  Also notice that although not oversold, the RSI is at the lowest point it has been since formation the channel.  As mentioned on the weekly timeframe, the target for the breakdown of a descending wedge is a 100% retracement of the wedge, which is this case is 95.85.

Source: Tradingview, City Index

On a 240-minute timeframe, DXY has halted at the support zone we have been highlighting from 97.03 to 97.18.  Price is consolidating just above these levels, as the RSI unwinds from oversold conditions. 

Source: Tradingview, City Index

First resistance is prior lows near 97.50 and the weekly trendline noted above at 97.60.  Next resistance level is the 38.2% retracement level from the October 1st highs to today’s lows and prior lows at 98.10/98.20.  Support at 95.87, which is prior lows and the target for the descending wedge on the daily.


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.