Markets on Friday: The USD Tanks Ahead of CPI
Rowan Crosby • 1 min read
The USD decided to keep on making its way lower in trade on Thursday. Ever since late 2017, the Greenback has been in bear mode and once again that trend was in place.
That meant the majors were all active and again it was the commodity currencies that were reaping the rewards. Both the AUD and NZD, ripped higher taking out key resistance levels. The EUR/USD also entered bull mode after the release of the ECB minutes. It looks like there is some chance of bond purchases winding down in the foreseeable future.
The Cryptocurrencies bore the brunt of more regulatory issues. South Korea looks like it might impose a full ban on trading cryptocurrencies on exchanges. This weighed heavily across the board. Although Ripple got a bounce on a report that it might be getting some more mainstream adoption.
Is the USD at Support?
I spoke yesterday about the USD and the fact that we were still in a neutral trading range. The top and bottom of the current range are 92.80 and 91.80. As it stands we are sitting right on the support level that we outlined – 91.80.
If we crack this one then we are well on our way down to 91.00 on the US Dollar Index (DXY). And we have every chance of some serious action today, thanks to US CPI.
Anything remotely bearish is going to hammer the USD. Given the fact we are so close to this level means we have a fair bit of downside risk. So I would be positioning myself for that eventuality in all the majors. It might be a lot easier to fall than it would be to rally at the moment.