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USD Graphic Rewind: Hope Fades of Short-Term Base in DXY
Written by article default Thursday, 05 May 2011 09:53
The dollar index managed to keep hopes alive of diehard US dollar bulls by managing to eke out a positive close yesterday, keeping the hopes of a short-term base alive, just. Despite touching fresh multi-year lows early in the US session, as the typical USD selling took hold, the buck was actually decently bid through most of the day as equities and commodities remained soft and Fed Fisher kept up his hawkish rhetoric.
The recent trend of US dollar strength in Asia and early in Europe and then fading into the US open is likely to be ruined today with key event risk in the form of the ECB rate decision, and the less exciting Bank of England rate decision later. This is all in the build up to the highly anticipated US NFP jobs reports tomorrow which is likely to see heightened volatility and some positioning ahead of the event.
Looking ahead, as we mentioned above a morsel of hope is still visible of the dollar index carving out a short-term base on daily charts. Today’s price actions, however, is already looking like it is set to destroy that notion with the index well offered in early European trade, today’s close though will be closely monitored for more signals.