USDIndex, H1
The USDIndex is near net unchanged on the day, at 94.30, having recovered from the 6-day low that was printed during the early European AM session at 94.40. Markets are ticking over in the absence of US participants, lacking commitment. There remains some debate about how the evolving US-driven trade war will affect the Dollar.
The central view is that a prolonging move to global trade protectionism would be negative for the Dollar, given the built-in vulnerability that the Dollar has to an entrenched risk-off scenario due to the US twin deficits, especially if China was to play low by reducing its demand for US Treasuries.
However, as we saw earlier this week, weakness in emerging market currencies, including the China’s managed depreciation of the Yuan and the weakness in other higher beta currencies, such as the Dollar bloc units, could boost Dollar higher. As for the narrow trade-weighted Index, the direction of EURUSD has an outsized impact given the dominance of the Euro in the weighting.
The USDIndex is near the midway point of a range that’s been seen since early 2015, although there have been some pretty big swings over the interim. Therefore despite doji trading so far today, the asset remains above 20-Day MA and above up-channel’s neckline.
Intraday Resistance levels: 94.55, 94.85, 95.00
Intraday Support Levels: 94.10, 93.95, 93.65
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Andria Pichidi
Market Analyst
HotForex
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