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USD will regain momentum if it stays above 90

“The hardest part of investing is holding on through difficult periods and taking short-term pain so you can have long-term gains” — Jim Cramer.

USD will regain momentum if it stays above 90

For the last couple of weeks the US dollar struggling to find the upside momentum and the USD investors seek answers after the recent sell-off;  

1.      When will the US dollar rebound?

2.      What’s happening with USD?

3.      How much lower can USD go?

The simplest answer is, the king dollar may rebound if there is strong buying pressure above 90. On the positive side, the dollar closed last week above the 90 psychological level but it is far too early however to suggest the USD dominant downtrend is over.

During the last week, the dollar index rebounded from more than 4 -month lows boosted by positive economic data includes strong jobless claims figures and prospects of further fiscal stimulus. While USD began this week on a bearish tone and it closed below 90 level on Monday.

USD fundamental weekly forecast

Fundamentally the greenback expected to be extra volatile this week due to a busy economic calendar and all eyes remain on the Friday US Non-farm payrolls report. It will also be an idea to keep a look out for the comments from the FED speakers this week including Atlanta FED President Raphael Bostic and FRB Vice Chair Randal Quarles.

Last week both the FED officials maintained the view that the surge in inflation is likely to prove to be temporary and that it’s not the time for discussing policy normalization yet. So in case if they change their views this week then the speculation will rise over a potential taper of QE, which could provide a boost for the US dollar.

USD technical analysis for this week

DXY

Technically the overall momentum remained bearish for the Index after the bears break below the 90.00 area. This week USD has a weekly resistance at 90.45 break this and close above this resistance level then expect the market to zoom up to 90.90 and 91.40. On the flip side, the bears need to see a confirmed break below the crucial support 89.20 to objectively tell us that the uptrend has ended. And for the short term, the immediate support at 89.80 followed by 89.50.

In the long term, watch for the weekly close below 89.20 or above 91.45, which will give a larger confirmation of direction in the long term.

 

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