Currency Analysis Report 10/13/19 – Rough Week For The US Dollar

Not only is the world’s currency the US dollar, but it’s one of three safe haven currencies in the world (the other two being the Swiss Franc and the Japanese Yen).  And as long as the US economy grows, relative to other economies and US interest rates remain positive and/or higher relative to other central banks around the world, the US dollar should continue to appreciate.

However, late last week we received news regarding the US-China trade talk that Chinese Vice Premier Liu He said China was willing to reach an agreement with the United States to minimize further escalation in trade tariffs. The feeling appeared to be mutual by Trump going into the discussions,

 which was later followed up with Trump said his negotiators reached a “substantial phase-one deal” that will delay the implementation of more US tariffs on Chinese imports. On the news the dollar’s weakness ignited a rally in the euro with the single currency rallying 0.5% to a two-week high. In addition, the British pound rallied after British and Irish leaders meet to have a treaty agreed to allowing the England to leave the EU in an orderly fashion by the end of this month.

As a result of good news on the US-China trade front and a potential amicable Brexit, the dollar had its biggest one day drop in five weeks late last week. So is this just the beginning of a bigger drop for the US dollar, lets go to the charts to find out?

Monthly Chart (Curve Time Frame) – monthly supply is at 101.50 and monthly demand is at 90.

Weekly Chart (Trend Time Frame) – the trend is still up.

Daily Chart (Entry Time Frame) – the chart suggest it’s not time to go short the US dollar and to wait for price to hit 100.25.

However, if price breaches the 98.00 level, the chart could be suggesting to prepare to go short.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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