US Dollar Prospect
The US Dollar has in recent weeks shown some downside risks. There is no clear catalyst yet to drive positive sentiment; if the market senses that more liquidity is on the Fed menu, the currency may naturally take a hit.There are also external factors to consider, for example the Brexit deal which could potentially push the Pound and Euro higher, at the expense of the Dollar. However, although the risk would increase, none of this would change the situation either. Unless the US carries out a full national lockdown when Biden takes over in January, it’s hard to imagine any of these will actually sink the Dollar, especially considering the ECB has been holding on to the $1.2000 level on EURUSD of late. Whenever EURUSD rises towards $1.2000, the central bank is likely to start commenting.
Hence, while the Dollar may feel a little hot and volatile, the downside looks somewhat limited. As you can see on the USDIndex chart, this week’s prices are quite flat, and there hasn’t been any significant movement yet. The candle is still on the side of the lower band, 26 EMA is holding back the attempted rally, and AO is still on the negative side. However, this downside movement is indeed quite limited, as the market seems to be entering a consolidating and potentially choppy phase.
Ady Phangestu
Analyst – HF Indonesia
Click here to access the HotForex Economic Calendar
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
