US Dollar Price, News and Analysis:
- US dollar (DXY) graph remains positive.
- Providing security as the risk assessment continues.
The US dollar basket (DXY) is approaching a recent high of several months, supported by the provision of safe haven, as risk markets remain cautious about the continued spread of the delta covid variant and its potential impact on global growth. If governments around the world continue to ease locking measures, the delta covid option will spread rapidly, adding fuel to the view that easing locking measures may happen too quickly. The re-imposition of any lock-in measures will affect an already weakened economy, limiting growth prospects in the coming months. The US dollar is the main beneficiary of a risk-free environment Swiss franc and Japanese yen, and although this remains the case, the green volume should continue at the higher edge.
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The US dollar continues to be supported by the channel’s short-term support as DXY now approaches its first major resistance test, at a higher level of 93.47 on March 31. This level also reduces channel resistance and can be difficult to convincingly exceed before next Wednesday’s level FOMC meeting. The CCI indicator shows that the dollar is currently in overbought territory, suggesting that a period of consolidation may be due, while the recent 50/200-dsma crossover – the golden cross – adds to the current bullish sentiment. It seems unlikely that the short-term bullish channel will break before the FOMC, although Monday’s sharp risk sale should serve as a warning that markets will remain in place during the summer holidays.
US Dollar Cart (DXY) Daily Price Chart (November 2020 – July 21, 2021)
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