Has the dollar made weekly lows against its counterparts?
Let’s take a look at the hourly chart of the dollar index!
Before moving on, yesterday’s ICYMI watchlist looked at the NZD/CHF short-term range ahead of New Zealand’s quarterly inflation report. Check if it’s still a valid play!
And here are the headlines that rocked the market in the last trading session:
Fresh market headlines and economic data:
New York manufacturing activity shrinks for three months, dropping to -9.1 in October
BOC survey: Canadian businesses see recession coming while inflation expectations remain high
UK Finance Minister Jeremy Hunt drops most of UK tax cut plans
China delays release of key economic data amid party congress
New Zealand inflation remains at 32-year high at 7.2%, fueling RBNZ betting
RBA meeting minutes: Smaller increase justified given pace of ‘substantial’ rate hike and delay effect
RBA: Further rate hikes ‘likely’ in coming period
BoE to delay further bond sales until markets calm down – FT
Eurozone ZEW economic sentiment at 9am GMT
German ZEW economic sentiment at 9am GMT
Canadian mortgages start at 12:15pm GMT
U.S. industrial production at 1:15 p.m. GMT
2:00 p.m. GMT US NAHB Housing Market Index
use our new currency heatmap Get a quick visual overview of the Forex market price action! 🔥 🗺️
There aren’t many top-notch US data slated for release, so the market had time to price UK Prime Minister Jeremy Hunt to withdraw Liz Truss tax cut plan.
It also didn’t matter that New Zealand’s inflation report and the release of the Reserve Bank of Australia (RBA) minutes indicated further rate hikes by the RBA and Reserve Bank of New Zealand (RBNZ).
The risk-friendly trading environment did some damage to the dollar, dragging the dollar index all the way from Friday’s high of 113.45 to the psychological handle of 112.00.
Has the Dollar Hit Weekly Lows Against Major Currencies?
On a technical basis, the dollar appears to be supported at 112.00. As you can see, this area is acting as a range support on one timeframe.
Meanwhile, the Stochastic has just left the oversold level and is gaining momentum.
I haven’t seen top-notch economic data from the US today, so dollar price action will likely center around market sentiment.
Keep an eye out for US earnings reports that could paint a bullish or bearish picture of the economy.
Of course, traders can also go back to pricing at higher interest rates, which is likely to lead to a recession in the world’s largest economy.
A round of risk aversion could push the DXY back to the 112.75 midrange level, if not the 113.50 range resistance area.
On the other hand, continued dollar selling could push the dollar down to 112.00, possibly triggering a retest of the previous inflection point at 111.70 or 110.80.