DXY – Daily

DXY –

The daily Ichimoku chart displayed mostly indecisive moves throughout August and printed a low of 91.74 last month. It seemed DXY essentially tip-toed sideways as the market attempted to factor in both the US election event and the second wave of COVID-19. As the current price resides within the cloud, this wavering sentiment appears unresolved and even slightly bearish.

Signs of Dollar weakness crept into this chart, most notably when the recent test of 94.74 failed at the top of the cloud. We also see DXY respecting September’s monthly pivot but then unable to find price stability, in the same manner, this month. If anything, the price appears to be clinging on to the cloud base for support instead.

Despite the negatives, it might not be all doom and gloom for the Dollar just yet. For starters, the cloud seems to be thinning towards the end of the year, representing less resistance for DXY should sentiment turn bullish.

It’s also worth remembering that there have only been two significant price highs in recent history. The first was back in 2016 at the time of the previous US election campaign and the second time occurred at the height of the pandemic this year. Could lightning strike twice?

Particularly as we approach the month of November, there is a potential scenario whereby both the US election and a full-blown second wave of the virus could coincide and ignite another Dollar rally. If so, the Index may target the 97.00 regions once clear of the resistance at 95.00. Alternatively, we may see these types of events cancel each other out, with the price grinding lower to 2018 lows around 88.00.

Either way, this chart will undoubtedly be one to keep on the radar.

 

Note: Click on charts to enlarge.

 

By Adam Taylor CTEe

.@adamt_trading

Sources: Go Markets, Meta Trader 5, TradingView, Bloomberg

Disclaimer: The articles are from GO Markets analysts,  based on their independent analysis or personal experiences. Views or opinions or trading styles expressed are of their own;  should not be taken as either representative of or shared by GO Markets.  Advice (if any),  are of a ‘general’ nature and not based on your personal objectives, financial situation or needs.  You should therefore consider how appropriate the advice (if any) is to your objectives, financial situation and needs, before acting on the advice.  If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.

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