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DXY ends the week on the back foot and at KEY support

1. Dollar Index continues to slide and confirms short term (ST) triple top BUT………

……………it has reached a familiar support zone in the form of its long term (LT) mean and its 1+ year up trending T-Line. Similar price action occurred at the end of last year when the USD Index experienced a short term distribution period and formed a triple top which was confirmed but found support at its long term mean and bounced. Fast forward to the present and we have the same price action again and on Friday right after the NFP release saw the USD Index end the week below its LT mean and tagged its T-line.

2. This time is different for the USD Index

The difference between now and the end of last year is the change in tone from the FED. The FED was still hawkish last year but now they have turned dovish and are hinting that rate cuts are a possibility as they will like to keep the expansionary environment in the US economy. The lacklustre NFP print of +75k jobs justifies their dovish stance which in turn has seen the USD weaken across the board. The 5-day performance chart below shows all major currencies posting gains with the CAD leading the charge.