The USD Slowly Regains Some Ground
Rowan Crosby • 1 min read
The USD managed to tick higher on Monday trade, while much of the action was overseas.
Clearly the big news of the day was out of the UK in that PM May had delayed the Brexit vote. That sent the GBP/USD dumping hard and possibly contributed to some USD upside.
At the same time, it looked like the SPX was going to follow suit and sell-off after testing major support. However, in late trade the bulls regained control and we had a rally into the close led once again by the tech sector.
The main event on the radar today will be US PPI. We have a fair bit of data coming up this week that will impact the USD, with retail sales, CPI and of course PPI.
We are looking at a slightly weaker result than the last month and PPI is an important metric for the FOMC.
The USD Outlook
The DXY remains just below the resistance level at 97.00. To date, there have been some buyers at 96.50 that are holding up price.
For now, 97.00 is resistance with R2 at 97.70-80 while S2 remains at 96.00-20.
I actually think the Powell testimony might be the big market mover this week. If we get a clearer picture of what is in store for 2019 and the market thinks that interest rate hikes are in doubt, I feel we might see some downside.
That needs to be weighed against the trade developments and if there is any progress on the 90-day deal.