Posted on 5th December 2019
Dollar Fails again at the 94.00 level on the DXY (dollar index)
The US Dollar has been trading below the 98.40 since mid october. What does that mean to us? Is this a sign of the dollar opening up for long term weakness? 98.40 is a key pscychological level, that means it can set the picture for the long term on the US Dollar. Tie in this failing break out with weakening data coming out of the US such as employment figures starting to drop, it could really open up the door for the bears to take control of dollar markets. Important data comes out on the friday of writing this (05/12/2019) which will give us a much clearer picture. If we see the data come out week on friday i think it will confirm that the bears will take the dollar 2 or 3 points lower, which will see EURUSD trade its highest in two months. Trading the pound is very tricky at the moment, so it will be difficult to see how it holds up in this situation.
My outlook is bearish for the dollar, as it would take a drastic shock to data reports this week, to get above the 98.40 handle. Alternatively if the data once again misses the mark this week, the downside is open for business with the target of 97.00 then if that level doesn't hold we'll move to 96.50.
It will be interesting to see how these situations play out.