The USD Continues to Fade
Wall Street put in a second straight day in the red as investors continued to fear about what might lie ahead. While the USD continued to fade towards the lows.
The major indices all put in further losses, taking the two-day slide to more than 5%. The result wasn’t helped by a weaker than anticipated CPI figure that came in at 0.1% MoM.
On the back of the miss, markets sold off and closed red on the day. We also saw big moves in gold and oil. Gold, in particular, spiked higher after a period where we haven’t seen much of a response in what we would generally consider a leading risk-off indicator.
There isn’t much top-tier data to end the week. So we will be looking very much at more investor sentiment to see where markets end up to close the week.
The USD Outlook
The DXY continued its fall on Thursday and we now have the resistance level at 96.20 looking quite far away.
Price has come down through the bottom support level at 95.50 and is sitting on 95.00 for the time being.
94.00 is still the next big level below as I mentioned yesterday, so I do expect to see more downside.
The only saving grace might be that we sometimes do get reversals on a Friday as traders cover up and get square into the weekend. So for all those momentum traders that have been short the USD over the course of the week, we might get a push higher.
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