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- The US dollar continues to break lower after giving up key resistance at 94.62. The greenback has continued to slump with the return of stimulus talks.
The US dollar continues to break lower after giving up key resistance at 94.62. The greenback has continued to slump with the return of stimulus talks, which appear to be closer to completion.
President Trump increased his offer on Friday with a $1.8 trillion stimulus proposal. This is pushing optimism that a deal can be reached. Democrats initially wanted a $2.2 trillion deal but the gap is closing towards an agreement. This will continue to weigh on the U.S. currency, which recovered strongly from the September 1st lows on hopes that a second deal would not emerge.
Economist Stephen Moore, an adviser to Trump, said the economy doesn’t need $2.2 trillion. Moore said: “I see really strong numbers coming in for the third quarter… 30 percent to 35 percent growth, which shatters the all-time record for growth in one quarter.”
Tomorrow sees the release of U.S. inflation figures and this could confirm the current downtrend, or provide a welcome bounce for dollar bulls. Analysts are expecting a figure of 1.4%, compared to 1.3% last month. A higher number could see a rally in the greenback as traders revise their expectations for the Federal Reserve rate path.
US Dollar Technical Outlook
The US Dollar has continued to break lower after the failure at the 94.62 level. The index then fell through the 93.82 level and has moved below the 50-day moving average. The opportunity here is a short towards 92.00 and a stop around 93.35. Longs should wait for a daily close above the moving average around 93.50.
US Dollar Index Daily Chart
