Jump to content

US Dollar Reversal Persists, Technical Picture Looking Worrying


Recommended Posts

USD Price Analysis & News

  • USD Losses Extend as China Tariff and ECB Rate Hike Talk
  • Build up of USD Longs Create Worrying Short Term Picture

US Dollar Reversal Persists, Technical Picture Looking Worrying

The technical picture for the USD is looking more troubled as the index extends losses below the 103 handle. The latest catalyst stemming from reports that US President Biden is considering a move to cut China tariffs in order to ease inflationary pressures. This prompted a modest boost in risk sentiment, sapping demand from the safe-haven Dollar. What’s more, hawkish comments from ECB’s Lagarde further exacerbated losses in the greenback with the ECB President essentially pre-committing to a 25bps rate hike in July and September.

ECB LAGARDE

“Based on current outlook, we are likely to be in a position to exit negative interest rates by the end of the third quarter”

That being said, with positioning also very much on the long USD side, there could more pain for the USD as bullish bets are squeezed, particularly if equities remain stable. In turn, 103 now represents resistance, while short term support sits at 101.28, which marks the 23.6% retracement of the Jan 2021-May 2022 bull trend. Elsewhere, across the majors, while 1.07 will be watched in EUR/USD, the area to watch will be 1.0750, meanwhile, 127.00 will be key for USD/JPY.

IG CLIENT SENTIMENT SIGNALS MIXED EURUSD OUTLOOK

Data shows 67.81% of traders are net-long with the ratio of traders long to short at 2.11 to 1. The number of traders net-long is 0.12% lower than yesterday and 15.26% lower from last week, while the number of traders net-short is 0.94% lower than yesterday and 26.37% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/USD prices may continue to fall.

Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed EUR/USD trading bias.

US Dollar Chart: Daily Time

US Dollar Reversal Persists, Technical Picture Looking Worrying

Source: Refinitiv

 

May 23, 2022 | DailyFX
Justin McQueen, Strategist

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      21,652
    • Total Posts
      91,956
    • Total Members
      41,937
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    michaeljach
    Joined 28/03/23 09:13
  • Posts

    • This week should give a good picture of how the economies of many countries are doing.
    • Look into possible opportunities and use technical analysis to figure out where to get in and where to get out. Use risk management to make sure that each trade is profitable.
    • Micron Technology is poised to post a loss of 66 cents per share on another drop in revenue. Three months ago, sales fell 41% to just over $4 billion.  Jeremy Naylor | Analyst, London | Publication date: Tuesday 28 March 2023  The chip industry is still suffering from distortion originating from the Covid-19 pandemic. Orders soared during 2020 and 2021 to supply a technology boom, pushing Micron and other chip makers to produce more. Now, in the context of fears of a recession, they are left with excess inventories and are being forced to wind down their capital investment budget.   Micron earnings Tonight after the close of Wall Street we've got an all-session stock reporting earnings, which could be interesting. It is the chip company, Micron Technology. It's poised to post a loss of $0.66 per share. Revenue is expected to continue declining to $3.75 billion. Three months ago, sales fell 41%, just over $4 billion. So it's on this downward trajectory. As I say it is an all-session stock on the IG platform. You'll be able to take a tilt at this in the markets after the close. It will open at 9:00 this morning, UK time at 60.08, that's $60.08 a share. Share price chart Look at the pressure the stock has been under. The semiconductor industry generally still suffering from distortion originating from the Covid-19 pandemic. Orders soaring during 2020 and 2021 to supply a technology boom, pushing Micron and other chip makers to produce more. Now, in the context of fears of a recession, they are left with excess inventories and are forced to wind down their capital investment budget. Micron Technologies reporting after the bell this evening on this Tuesday, 28th of March.
×
×
  • Create New...