Despite several bearish fundamental factors, the US Dollar Index (DXY) has pushed past this week’s high and is en route to 91.00. Traders are left wondering if this is manipulation or a reversal occurring before their eyes.
The first bearish fundamental factor weighing on the Dollar was the remarks made by Jerome Powell. Powell said the Federal Reserve will take an accommodative approach to the current US economy. Powell said the Fed is ready to accommodate the American people during the ongoing pandemic as cases continue to rise. He hinted that interest rate hikes won’t be seen any time soon.
This was then followed by Biden’s speech where he indicated that everyone will pay their fair share, hinting at possible tax hikes. This morning US sales data came out far worse than expected with an actual result of -1.4% versus the forecast of -0.1%. Also, Michigan consumer confidence came in at 79.2 versus the forecast of 80.0.
Despite the ever-increasing Covid-19 cases and the bearish fundamental data, the Dollar hasn’t lost a step. If the DXY can break and close bullish above 91.00 on the daily time frame, traders can expect further bullishness to come. A failure to do this may reintroduce Dollar shorts into the markets.
Directory:
- Sign up for a Free Membership.
- Login to watch full recorded webinars in our Forex Trading Room.
- Chat with our traders in the Community Discord Server.
- Read yesterday’s breakdown: EURNZD Shorts + USD Priming For Powell’s Speech
