From a Technical perspective, the DXY has been weak as expected. It is currently testing a strong level of support. A confluence of factors is expected to hold the DXY above this support zone. A breach would lead to further losses after the DXY recorded the worst quarter in years.
From a fundamental perspective, this week's losses can be attributed to gains in the US equity markets on stimulus hopes. Market data is also looking good so far.
On the other hand, should a stimulus deal fail to substantiate, it could push the DXY HIGHER. In addition to this, data is just starting to come in. Big U.S. commercial banks are closing their books on the third quarter. The analysts expect them to report a 30% to 60% plunge in profits on the year-ago period due to the pandemic-induced recession and near record low interest rates. Investment Banks which have been busy in the capital markets, are also expected to report more modest profit declines.
I'll keep you updated as time goes on...
Keep monitoring USD pairs such as USDJPY, EURUSD & NZDUSD
From a fundamental perspective, this week's losses can be attributed to gains in the US equity markets on stimulus hopes. Market data is also looking good so far.
On the other hand, should a stimulus deal fail to substantiate, it could push the DXY HIGHER. In addition to this, data is just starting to come in. Big U.S. commercial banks are closing their books on the third quarter. The analysts expect them to report a 30% to 60% plunge in profits on the year-ago period due to the pandemic-induced recession and near record low interest rates. Investment Banks which have been busy in the capital markets, are also expected to report more modest profit declines.
I'll keep you updated as time goes on...
Keep monitoring USD pairs such as USDJPY, EURUSD & NZDUSD
Comment:
It is also important to note that the CFTC COT REPORT from last week shows that hedge funds closed more long positions. They haven't added many short positions
