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Dollar Index Weekly Analysis – WC 17th Dec

Dollar Index Weekly Analysis – WC 17th Dec

Dollar Index Weekly Analysis – WC 17th Dec

  • The USD could potentially remain under pressure heading into next week.  This comes as as the dollar index bulls have given back recent gains - unable to exceed the prior week’s high - and the USDX dropped below the 79.58 level during late trading on Friday (see fig-1 below).  This came as the greenback dropped for a fifth consecutive day versus the euro.
  • USDX 80.00 failed to provide sufficient support and the psychological round number level is now eyed as a a potential resistance area on any corrective upside move; further to this is the 80.58 – 80.65 zone which has capped price for three consecutive weeks.
  • The dollar index now looks vulnerable to the downside and the 78.55 area prior support zone is once again in focus; this area held the index as robust support in March, April and September this year.
  • dollar index 300x178 Dollar Index Weekly Analysis   WC 17th DecThe European single currency and Japanese yen are the most significant currency counterparts when referencing the dollar index basket of currencies – with a 57.6% and 13.6% weight respectively.  The latest COT report update shows large speculators were marginally less short on the key EUR FX (CME) futures contact with a 32K reading versus the prior 33K; the JPY net short position is at an extreme long 94K versus the previous week’s 90K level.  
  • Large specs had an increased short USD aggregate wager from $818 million to $3.2 billion according to the latest data from the CFTC (Commodity Futures Trading Commission).
  • We also note the EUR/USD pair took out the September 17th 1.3171 high (by a pip…) to reach 1.3173 late on Friday – this is the highest level seen since May for the key currency pair and price action heading into the new week could help provide a near term bias from this significant technical area.  USD/JPY came within 22 pips of the 15/3/12 previous swing high before losing momentum late Friday, and edging down below the daily open, to print the first lower close in four days.
dollar 300x157 Dollar Index Weekly Analysis   WC 17th Dec
Dollar Index Weekly Chart – fig 1

dollar index weekly december 17th Dollar Index Weekly Analysis   WC 17th Dec

Dollar Index Daily Chart – fig 2

dollar index d1 Dollar Index Weekly Analysis   WC 17th Dec

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