After five months of consecutive declines, reaching the lowest level since April of last year around 92.50’s, the US Dollar has been trading within a very tight range, with no clear break to the upside or the downside.
Long-Term Support Area
Since the beginning of the month, the US Dollar index is trading within our plan, outlined in many previous reports. The index has finally stabilized at a long-term support area, which stands between 93.0 and 91.80, which held since January of 2015 until today. Since then, each time the Index reached this area, it managed to rise once again to new highs. So the question is, is it the time to buy the US Dollar again? The possibility of a retracement is still there, but a catalyst is still needed.
Possible Catalyst Ahead
Since the beginning of the week, the US economic releases came in weaker than expected, even though there was a lack of fundamentals across the week. Yet, the US Dollar managed to stabilize around the same support area mentioned above.
In the meantime, one of the major catalysts might come from the Jackson Hall Symposium which starts today and ends on Saturday.
Eyes will be on Central Bankers once again as investors will be waiting for more clues about their future policies, especially that the easy monetary policy era is coming to an end sooner than later. This is according to their statements, released a few months ago. Therefore, traders need to keep an eye on these remarks today, tomorrow and over the weekend.
Today’s Fundamentals
There are only a few economic releases from the US today, which may have a medium impact on the markets. But the effect is most likely to be for a short period of time only. We will be watching the US Jobless Claims, Existing Home Sales, and Mortgage Delinquencies.
Estimates point to a higher Jobless Claims, higher Existing Home Sales and no estimates for Mortgage Delinquencies. Yet, yesterday we had a negative surprise from the US New Home Sales, therefore, we will keep the margin higher for a possible surprise today as well.
