Dollar Prepares to Storm Significant LevelsDollar Index is close to the upper limit of its 6-months trading range. GBPUSD remains trapped between MA200 and 1.30. Oil has jumped at the start of the week by 3%: WTI – $66, Brent – $73.70.
US Dollar Index
The Dollar began trading on this week at around 97 for USDX, remaining near the high-end of its 6 months’ trading range. The American currency has repeatedly departed from these levels, but this year the corrective kickbacks became less pronounced. This can be viewed as a sign of the weakening pressure from the dollar sellers. The Breakthrough of the resistance area could be able to shift the scope of USDX buyers to a major round level of 100, and further to 103, to where the dollar climbed in early 2017.
The British pound remains trapped between the support on a 200-day moving average (now at around 1.2970) and a resistance level at around 1.3000. In addition, it’s worth mentioning that the GBPUSD pair has fallen below the uptrend support, but the reverse to decline will only be confirmed after the pair goes under the previous local lows of 1.2970.
Following a Euro’s sale at the end of last week, this week began with a cautious growth of the single currency to to 1.1250 dollar. There will be not much economic releases at European session on Tuesday, thus volatility is expected to be lighter. Among important macroeconomic publications today, it is worth paying attention to the U.S. new home sales. The real estate market is a significant indicator of overall economic activity. Lower housing sales will be able to help the EURUSD repair some of its losses.
Oil has jumped at the start of the week by 3%% to $66 for WTI and 73.70 for Brent. The reason behind this spike was the announcement that US will no longer grant sanctions waivers to any country that is currently importing from Iran. In addition to the collapse of production in Venezuela and the rigid OPEC+ quotas, this solution will shift the balance of production and consumption further towards the deficit. This is very good and positive news for oil itself, but it is worth keeping an eye on the comments from OPEC and the presidential administration. The chances of OPEC + increasing the levels of quotas is now higher. Moreover Trump, in turn, has repeatedly put verbal pressure on oil quotes, as he sees cheaper Oil to be the source of economic growth.
This article was written by FxPro