The USD Pressing into Resistance
Rowan Crosby • 1 min read
The USD has been ticking higher this week and we are now looking at another test of resistance.
For the most part, the action was overseas yesterday as the breakdown in the GBP/USD is there for all to see on the back of the political turmoil surrounding Brexit.
However, equity markets in the US got rocked by a clash between President Trump and the Democrat leaders in a live television event. The clash was surrounding the potential for a Government shutdown on the back of building and financing the border wall with Mexico.
Today the USD will be in focus once again as we get the release of CPI data out of the US. We are looking at a 0.2% reading which is the same as the prior month. We had a strong PPI print which came on the back of falling oil prices and that might be a good omen for this number.
The USD Outlook
The DXY remains just below the resistance level at 97.50. We have now tested this level three times and all those occasions have failed previously
For now 97.00 is S1 with R2 at 97.70-80 while S2 remains at 96.00-20.
My only concern at the moment is that volumes are generally a bit lighter this time of year. Meaning that a breakout might be harder to sustain.
That said given the uncertainty in the air, volume can still come thick and fast.