The Dollar Index Did Not Fall Off A Cliff Despite U.S. Government Shutdown
AvaTrade | Jan 22, 2018 04:11AM ET
Summary:
- The dollar has traded in a range between 90-90.5 against a basket of six majors for much of last week. Be patient until we see a clear breakout.
- The federal government shut down after senators rejected a temporary spending bill at 1300 Friday BJT. Another vote is expected to hold at 1400 Monday BJT.
The dollar has traded in a range between 90-90.5 against a basket of six majors for much of last week. The federal government shut down after senators rejected a temporary spending bill at 1300 Friday BJT. Look at another vote which is expected to hold at 1400 Monday BJT to have long-last markets impact.
Technical
The dollar index (DXY) bounced back again after hitting a low last Friday before it opened lower slightly on Monday due to U.S. government shutdown. However, the dollar did not decline straightforward in Asian session today. The dollar still hovered below its long term moving averages on the 4 hour chart. Look at the potential changes in the relationship between its short term and long term moving averages.
As to non-U.S. currencies, the euro failed to create a new high within its uptrend, for the shared currency hovered above its long term moving averages. Look for the potential supports at its H4-EMA30 and EMA60. The British pound pulled back to retest its H1-period trend support after shooting up. Look at the potential crossover between its short term moving averages and long term moving averages on the 1 hour chart. The Aussie dollar pushed back after creating a new high last Friday with an obvious bearish divergence in its MACD indicator on the 4 hour chart. Whether or not the commodity currency’s corrective decline could challenge its downside support at circa 0.7950 will be important to observe.
Take a look at precious metals now. The gold rallied amid concerns over the potential U.S. government shutdown last Friday before it retreated in London and New York sessions. The yellow metal extended the corrective decline, could potentially test its H4-period long term moving averages though gapped higher in early Monday session. Look at the potential changes in the short-term momentum.
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