23 Oct 2013
DXY continues bearish ways – closing below projected support at 79.39; next target 78.96
FXstreet.com (Barcelona) - The DXY was hammered Tuesday as a result of the domino effect that started with the sluggish monthly Non-Farm Payrolls Report out of the US.
The real focus for traders is what the FOMC is likely to do or not do with QE3
The jobs number grabbed all the headlines, but it’s the end of the chain reaction that traders really care about. The poor number Tuesday sent rates lower, the DXY lower and basically eliminated any chance that the Fed would be tapering their QE3 program anytime soon. It’s not that anyone really thought that Bernanke or Yellen would be upsetting the apple cart ahead of or simultaneous with more Washington shenanigans – but Tuesday’s number took the chances of hawkish action at the next meeting to nearly zero.
DXY drivers Wednesday include: Aussie Leading Indicators; Aussie CPI; Bank of England monthly policy meeting minutes; British Mortgage Approvals; the German 10-Year Bund auction; EU Consumer Confidence; US Monthly Mortgage Apps; US Export Price Index; and, the US Housing Price Index.
Technical outlook for DXY
Technicians say the DXY broke below projected short-term support at 79.39 – yet another notch in the bears’ belt. The next potential target is the upper edge of a projected range of “correction support” at 78.96. The real “line in the sand” for any remaining DXY bulls, however, comes in at 78.63. The layers of resistance are really starting to stack up, but the first two hurdles for DXY bulls are Monday’s high of 79.82 and last Wednesday’s high of 80.75.
The real focus for traders is what the FOMC is likely to do or not do with QE3
The jobs number grabbed all the headlines, but it’s the end of the chain reaction that traders really care about. The poor number Tuesday sent rates lower, the DXY lower and basically eliminated any chance that the Fed would be tapering their QE3 program anytime soon. It’s not that anyone really thought that Bernanke or Yellen would be upsetting the apple cart ahead of or simultaneous with more Washington shenanigans – but Tuesday’s number took the chances of hawkish action at the next meeting to nearly zero.
DXY drivers Wednesday include: Aussie Leading Indicators; Aussie CPI; Bank of England monthly policy meeting minutes; British Mortgage Approvals; the German 10-Year Bund auction; EU Consumer Confidence; US Monthly Mortgage Apps; US Export Price Index; and, the US Housing Price Index.
Technical outlook for DXY
Technicians say the DXY broke below projected short-term support at 79.39 – yet another notch in the bears’ belt. The next potential target is the upper edge of a projected range of “correction support” at 78.96. The real “line in the sand” for any remaining DXY bulls, however, comes in at 78.63. The layers of resistance are really starting to stack up, but the first two hurdles for DXY bulls are Monday’s high of 79.82 and last Wednesday’s high of 80.75.