Back
18 Oct 2013
DXY cascades lower Thursday as traders no longer concerned themselves with Fed tapering
FXstreet.com (Barcelona) - Congressional resolution leads to no tapering leads to yields falling which finally leads to free-falling DXY. Any questions?
DXY falling part of a larger cause and effect surrounding different parts of the US government
Once the US Congress passed the resolution last night that basically guaranteed a whole new round of food fighting in a couple of months, global managers, investors and traders deduced that any Fed tapering would have to be postponed until at least March of 2014 and likely until later in 2014. The result of this thought process was for Treasury yields to fall and the DXY to be hammered.
The DXY may be influenced Friday by Chinese GDP and Canadian inflation data – as well as a speech by the Reserve Bank of Australia’s Glenn Stevens.
Technical outlook for DXY
Technicians say the DXY finished just above the 10/3 low of 79.63. A close below that level will lead to a continuation lower to at least 79 and possibly as low as 78.60 – the 9/14/12 intraday low. Resistance comes in at the recent peak at 80.51.
DXY falling part of a larger cause and effect surrounding different parts of the US government
Once the US Congress passed the resolution last night that basically guaranteed a whole new round of food fighting in a couple of months, global managers, investors and traders deduced that any Fed tapering would have to be postponed until at least March of 2014 and likely until later in 2014. The result of this thought process was for Treasury yields to fall and the DXY to be hammered.
The DXY may be influenced Friday by Chinese GDP and Canadian inflation data – as well as a speech by the Reserve Bank of Australia’s Glenn Stevens.
Technical outlook for DXY
Technicians say the DXY finished just above the 10/3 low of 79.63. A close below that level will lead to a continuation lower to at least 79 and possibly as low as 78.60 – the 9/14/12 intraday low. Resistance comes in at the recent peak at 80.51.