23 Aug 2013
DXY logs a daily gain but finished off highs; target 80.51 to be hit?
FXstreet.com (Barcelona) - A steady trend higher all session for the DXY turned to sudden two-directional volatility starting at around 18:00 GMT. Still, though, the DXY finished just off the highs when all was said and done.
DXY digested all Chinese, European and domestic data and ran higher
The DXY managed to weather a barrage of data Thursday and keep trucking higher – despite some volatility at the end of the session (which may have been tied indirectly to the three hours of down time on the NASDAQ Thursday afternoon).
Chinese PMI, German PMI, EuroZone PMI, US PMI and some other minor reports all pointed in the economic bulls’ favor – and in the favor of the Fed beginning their tapering program sooner than later. The only piece of data that did not favor economic recovery and higher Treasury yields was the higher-than-expected level of weekly jobless claims in the US. However, traders and analysts place more emphasis on the 4-week moving average of that number – which is still on the rise.
What’s the technical picture looking like for bond yields and the DXY?
Technicians say the 10-year Treasury yield (which peaked out at 2.92% today before finishing at 2.901%) has a little room left to the upside before a downside correction should take place. Their upside target for yields is 2.96% - 3.0%.
Those same technicians are saying the DXY may have a little downside left before the projected target of 80.51 will have been effectively tested. Once that level is tested, they say a fairly substantial up move to 85 – 88 is expected.
DXY digested all Chinese, European and domestic data and ran higher
The DXY managed to weather a barrage of data Thursday and keep trucking higher – despite some volatility at the end of the session (which may have been tied indirectly to the three hours of down time on the NASDAQ Thursday afternoon).
Chinese PMI, German PMI, EuroZone PMI, US PMI and some other minor reports all pointed in the economic bulls’ favor – and in the favor of the Fed beginning their tapering program sooner than later. The only piece of data that did not favor economic recovery and higher Treasury yields was the higher-than-expected level of weekly jobless claims in the US. However, traders and analysts place more emphasis on the 4-week moving average of that number – which is still on the rise.
What’s the technical picture looking like for bond yields and the DXY?
Technicians say the 10-year Treasury yield (which peaked out at 2.92% today before finishing at 2.901%) has a little room left to the upside before a downside correction should take place. Their upside target for yields is 2.96% - 3.0%.
Those same technicians are saying the DXY may have a little downside left before the projected target of 80.51 will have been effectively tested. Once that level is tested, they say a fairly substantial up move to 85 – 88 is expected.