- The US dollar pulled back slightly during the trading session on Monday, as the 1.3650 level has offered a little bit in the way of resistance, but then turned around to show signs of exhaustion.
- Nonetheless, later in the day we have seen buyers come back into the picture to show signs of life, and this is rather impressive considering just how straight up in the air the US dollar has shot.
Keep in mind that the 50-Day EMA has broken above the 200-Day EMA, crossing over to form a “golden cross”, which of course is a bullish sign for a lot of longer-term traders that are willing to hang onto a currency pair. That being said, this is a market indicator that is quite often late to trade, but in the longer-term it does tend to pan out.
Underneath, the 1.35 level would be a significant support level that a lot of people will be paying close attention to, because not only is it an area where we had seen a lot of resistance, but we have also to keep in mind that there is a certain amount of psychological importance attached to it as well.
The US Dollar Eats Everything
The US dollar looks as if it is going to continue to strengthen against almost everything as long as we have seen interest rates rise, which is exactly what’s been happening. Jerome Powell said on Tuesday that it’s likely that we may have to wait to see rates being cut in the United States, and that of course has made the US dollar strengthen yet again. Furthermore, you have to pay close attention to the bond markets, and therefore what they are doing as far as buying and selling is concerned.
To the upside, if we can break above the 1.37 level, then it’s likely that we could go looking to the 1.40 level. The market has been very noisy, and therefore it’s likely that it will be a straight shot higher, despite the fact that it has been very bullish over the last week or so. Given enough time, I fully anticipate that we could go to the 1.40 SGD level, but it may take some time to get there is this pair is typically a slow mover.
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