Keeping an eye on the US Dollar
In this blog post I want to talk about technical view of the US Dollar. I decided to return to US Dollar topic again, since the Dollar is currently at many important levels, and it is very interesting to view it from different angles.
Here’s the historical view at the US Dollar index, since the 1970s.
The Dollar has always been cyclical. However, in recent cycles, it hasn’t reached its previous highs, and it has fallen lower than previously in a downward cycle. Has the Dollar reached its cycle maximum?
Looking in more detail, the Dollar has gained strength over the last 10 years. After the crisis of 2008, it has only grown and now has reached significant levels of support & resistance.
If we look at the Deutsche Bank USD trade weighted Index, the Dollar is now in an important area – at its support line of the last decade.
What can we learn from this now, without taking macroeconomic developments into account? As I already mentioned previously, the Dollar cycle has a huge impact on the global economy and cash flow.
An easily accessible tool to keep track of is the “US Dollar index futures”. You can follow it at Tradingview by entering symbol DX1!
I will keep an eye on the Dollar and its movements in the range of 95,700 - 94,700.If the Dollar "stays" and does not fall below that range, then I believe that the dollar cycle has not changed its trend yet.If the Dollar drops below this price level, then there is reason to believe about the weakening of the Dollar.
Some other topics to watch out this week:
- The European Economic Summit and its decisions may affect many economic areas not only in Europe.
- Canada core retail sales
- US Unemployment claims
- German and European manufacturing and service sectors indicators.