The Greenback Slipped Again With Risk Of A Potential New Low Of The Year
AvaTrade | Jul 12, 2017 03:58AM ET
Summary
1.The Dollar Index staged a pull-back in Tuesday’s New York session to around 30, June low after a bearish reaction below a descending trenline on its 4 hour chart.
2.Gold rebounded sharply Tuesday and hit a descending trenline this morning on its 4 hour chart.
3.Crude oil rebounded and up to 200 pips Tuesday reinforced by U.S. oil inventory report. API data showed U.S. crude oil stocks decreased last week by 8.13 million barrels. Keep an eye on EIA’s supply report tonight.
The Dollar index (DXY) staged a breakout in New York session after it traded sideways as expected Tuesday in most part of the Asian and European session. The index turned lower sharply after a bearish reaction below a strong declining trendline resistance on its 4 hour chart despite comments from FED officials emphasizing tapering its QE by the end of the year. One of important reasons I said the greenback may decline this week was the lacklustre growth in average hourly earnings for several months which was traced out by last Friday’s NFP report and please keep in mind that could bode ill for inflation and retail sales reports due for release Friday.
Technical:
The Index saw its diverging short-term moving averages turned lower with strong bearish bias in New York session after hitting its long-term moving averages and dragged the latter down on its h4 chart. Keep an eye on its 30, June low at 95.19 and see if the Index would break down to test it or not today.
Now, turn our attentions to non-U.S. currencies. Euro shot up to its EMA169 on its 4 hour chart and created a new high of the year. Wait and see if the currency’s uptrend could carry on or not with possibility of corrective decline. The sterling, on the contrast, declined rapidly below its H4-period EMA169 support during New York trading. Keep an eye on a potential downtrend. The commodity currency Aussie dollar further extended its rally supporting by its daily rising trendline. The currency could form a lower daily high if it will stage an obvious pull-back.
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As to precious metals, gold rebounded rapidly Tuesday New York session and broke above its range at lower levels to a declining trendline resistance on its H4 chart. Its short-term moving averages turned higher with bullish bias after diverging. Its long-term moving averages were in the state of diverging with modestly bearish bias right now and could offer resistance to the price action of the gold. Keep an eye on its short-term moving averages and see if they could move closer to and penetrate its long-term averages.
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