Talking Points
US DOLLAR DROPS THROUGH TREND-LINE SUPPORT
The US Dollar has continued its two week descent, and this comes just after the Greenback set a fresh yearly high in the middle of August. It’s been a quick retracement in USD and as we looked at yesterday, prices were previously sitting on a big support level around the 95.00 handle on DXY. This wasn’t the first time that support came into play, as we’d seen something similar show in early-August. But during that run, the Euro caught another wave of selling as fears around contagion from Turkey pushed the single currency lower, driving EUR/USD along with it. This is what helped DXY breakout to that fresh yearly high two weeks ago; and as EUR/USD has recovered, DXY has retraced.
But elsewhere, in pairs such as GBP/USD and AUD/USD, the question remains whether the bullish trend in the US Dollar is dead and gone or whether we’ve just pulled back and reloaded for another run of continuation. Below, we look through three major currency pairs to investigate this deviation and where traders may be best served looking for US Dollar weakness to show with a bit more prominence, or which markets may be best positioned for a return of US Dollar strength.
