Earlier today we discussed how AUD/USD and NZD/USD were melting down and the possibility that we may have to start paying attention to USD/CNH again. But the US Dollar Index is having a breakout of its own against many of the G-10 currencies today. Summarizing the day:
- US Dollar: higher
- Stocks: higher
- Fixed Income: lower
- Precious metals: lower
So why is the DXY higher? It could be fear of Trump impeachment or that the trade deal with China won’t get done. It may be nervousness around a liquidity crisis, Brexit, or problems with European banks. There is also the possibility that it may be due to US Dollar buying into month/quarter end on Monday.
So, in addition to the US Dollar pairs we discussed earlier, let’s look at the DXY itself.
As I had be discussing ad nauseum, the DXY had been in a trading range for the last 2 weeks. Today we finally broke out above 98.70 and are currently testing the highs from September 12th near 99.00. This horizontal resistance also acts as the breakout level for an ascending triangle. If price break above these levels, DXY could move all the way to 99.80, which is the top of the longer-term ascending channel, as well as the 127% retracement from the September 3rd highs to the September 13th lows. US Dollar bulls will look to buy dips to support near 98.70. Below that, trendline support comes in at the days lows of 98.36.
Source: Tradingview, City Index
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 cityindex.com.sg for the complete Risk Disclosure Statement.
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.