– DXY Index stranded in operation between 94.29 and 95.17, though it’s looking increasingly expected a exam of a operation lows is due.
– Even dual leaders among a USD-pairs given a commencement of September, USD/CHF and USD/JPY, are looking vulnerable.
– Retail merchant sentiment has shifted to a neutral USD outlook, suggesting that a spin might be coming.
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During a still like this one, traders might start to knowledge déjà vu, that is, any day seems like a CO duplicate of a last. Such has been a box for a US Dollar, as it stays within a two-week operation forged out given a finish of October. The range, between 94.29 and 95.17, has small reason to mangle one approach or a other, given a miss of drivers on a evident horizon.
Chart 1: DXY Index Daily Timeframe (July to Nov 2017)
For now, quite in a run adult to a Thanksgiving holiday in a United States in dual weeks time, a awaiting of taxation remodel legislation will be a pivotal source of change for a US Dollar. Speculation around a Fed is reduce down a totem stick as a vital influence; markets have been pricing in a 100% of a 25-bps rate travel in Dec for a past dual weeks.
As it were, a DXY Index stays between dual pivotal levels, 94.29 (the neckline of a different conduct shoulders pattern, as good as a Jul 26 bearish outward engulfing bar high) and 95.17 (the Jul 20 bearish outward engulfing bar high). Given cost movement currently opposite sold USD-pairs, in sold EUR/USD, USD/CAD, and USD/JPY, it seems a many expected outcome in a near-term would be for a exam of a 94.29 operation low in DXY.
See a above video for technical considerations in a DXY Index, EUR/USD, GBP/USD, AUD/USD, USD/JPY, USD/CHF, and NZD/USD.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
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