Forex FX 4X – US Dollar Index Analysis – WC December 3rd
(Dollar Index Weekly Update, Forex-FX-4X.com, Week Of 3rd December)
- The USDX found support just above the 80.00 handle (with its 50% corrective retrace confluence) over the past week, with a move down to 80.03 on Tuesday and Thursday respectively.
- Converging 100 and 200 period daily SMA’s (simple moving averages) marked the weekly range high around 80.58, with the D1 candle on Wednesday breaking higher before edging down on the closing basis. The lack of a significant directional bias, with solid associated flows, has the dollar index trading at the same level it spent most of October oscillating around. End of year trading may see this theme continue unless a fresh catalyst can be found.
- The latest Commodity Futures Trading Commission “COT report” data (commitment of traders) shows large currency futures speculators cut the net long US dollar position by around a third on the weekly basis.
- USDX has now closed the month only marginally higher (around 30 pips) after retracing from earlier 81.50 area highs near the start of November. It is however worth noting that this is the first monthly gain, after three consecutive declining months for the dollar index.
- The strong bearish candle from last week (see figure 2) still adds a negative tone when referencing the weekly chart. The lack of momentum on the follow through will however please USD bulls somewhat.
- When looking at the currency majors we see that November gave the fourth consecutive monthly gain for the EUR versus the USD at +0.3%. Price is yet again trading around the key 1.3000 level for the EUR, which is heavily weighted in the dollar index.
- The dollar/yen has seen a gain of around 3.5% over the same period. The Japanese yen carries a 13.6% weight in the USDX basket of currencies and is second only to the euro in this respect. See our latest USD/JPY weekly analysis update.
Dollar Index Daily Chart – (Figure 1)
Dollar Index Weekly Chart – (Figure 2)
Forex FX 4X.com – US Dollar Index Report and Outlook For WC December 3rd