DXY: Price Heading To 94.5 In 2019?
With a relatively slow week for the Dollar its time to look at the longer term perspective of where we could see price headed. With the impending rate hikes, I believe that 97.86 is still achievable before year end. Sustained strong economic data has provided some healthy gains for DXY recently as we finally saw a break above 97.00.
Despite these factors the Dollar is appearing poised to depreciate. The US economy is beginning to cool off from its fast rate of growth of late, investors are starting to come to terms with the likelihood of a drag on growth from government restraint in 2020. A widening current account deficit will also stear investors away from the Dollar into other major currencies and assets.
From a technical perspective, DXY does have a few support floors to break, it is currently sat on 4th bounce of a bullish trendline at 96.50, when this breaks it is likely to find its feet around the 96.00 strong support level. Do not be surprised for Q1 of 2019 to see price trading back in the region of 94.50.
Written by Sam Moore