A recovery in existing home sales has done nothing to stem the tide of US Dollar weakness, with the USD Index taking a massive hit on the day to extend its losing streak into the 4th day.
The USD Index has now lost ground on 11 out of the last 14 trading days. This is a feat which was only surpassed by the slump from 26 May to 10 June. Existing home sales staged a 20.7% rebound from the previous figure. However, the positive home sales data continues to be offset by the latest coronavirus case counts. The latest data indicate a further worsening of the domestic coronavirus situation in the US.
The Department of Health in Florida state is reporting an increase in new coronavirus infections to 9,785, taking the state’s total to 376,619. Ahead of yet another record-breaking day for coronavirus case counts in the country, US President Donald Trump has finally admitted that things could get far worse before they improve.
Technical Outlook for DXY
The DXY continues its slump, and today’s price candle has breached the critical support target at 95.03, identified in yesterday’s analysis as the next price target in line for the bears. Another daily candle close below this level is needed to confirm the breakdown of the price. This setup would place sellers in a great position to make a move for 94.62, where the lows of 9 March reside. Further decline targets a multi-year low of 93.80.
On the flip side, failure to confirm the breakdown of 95.03 may allow for some recovery towards 95.19 or 95.72, with 96.07 and 96.46 remaining relevant for a retracement rally option. However, continued bearish sentiment on the US Dollar may turn these areas into possible price levels where traders may decide to sell on rallies.