US Dollar Price Forecast, Analysis and Chart:
- USD liquidity continues to boost the greenback’s value.
- Explosive move reminiscent of late-2008/early 2010.
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Traits of Successful Traders
Investors Demand for US Dollar Liquidity Continues.
As the effects of the coronavirus roil global financial, the US dollar remains the safe-haven of choice as liquidity remains the primary driver of all asset classes. The grab for dollars can be seen across a wide range of FX-pairs, causing traditionally outsized moves and extreme volatility. GBP/USD has fallen from a high of 1.3200 to a multi-decade low of 1.1450 since March 9, while USD/CAD has soared from 1.3520 to a high today of 1.4660 over the same timeframe, unprecedented moves in recent times. While both GBP and CAD are suffering as currencies on their own, the demand for dollars is unrepentant. This is despite the Fed opening up the liquidity taps and offering cross-currencies swap lines with other major central banks.
The daily DXY chart is now pushing back to highs last seen in January 2017 and is approaching a 17-year print of 103.85. Above here, the US dollar will be trading at levels last seen at the start of January 2017.
US Dollar Basket (DXY) Daily Price Chart (October 2019 – March 19, 2020)
The monthly DXY chart shows the dollar starting to make the same explosive upside moves seen during the global financial crisis late-200 and early 2010 when the greenback rose by over 20% in both instances. The current move is around 8.5%. The monthly chart is also showing a bullish pennant formation with a convincing break and close above the 103.85 the next potential bullish trigger.
US Dollar Basket (DXY) Monthly Chart (2002 – March 19 ,2020)
For all market moving data and events see the DailyFX Calendar
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Download our Q1 US Dollar Forecast
Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.
What is your view on the US Dollar – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.
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