- USD has been hit by a wave of selling today
- USDIDX threatening to break below 93
- Gold hits two week high above 1290/oz
The US dollar is seeing some selling pressure today with the buck falling against practically all of its peers with only Bitcoin and Dash failing to appreciate against USD. There is little by the way of fresh news to support this weakness but the scale of the selling suggests that the recent recovery is under threat.
USD is coming under pressure today and set for a notable daily decline. Source: xStation
Whilst it is unlikely that all the weakness seen is a result of political uncertainty in the US, which continues to threaten to undermine the USD recovery, it could be playing a part. Trump’s latest feud with Republican Bob Corker could threaten the President’s agenda with Trump needing Corker’s vote as the Republicans only have a 52-48 majority in the Senate. Trump had been hoping to pass his tax bill after being frustrated in all of his attempts so far to implement his major proposed fiscal stimulus and with other Republicans such as John McCain and Rand Paul potentially not backing him, the latest disagreement within his own party will certainly not have helped his cause.
The USDIDX is on course for its largest daily decline in a month and the market is now back at the 93 level. Despite some volatile trade after the NFP report on Friday, the market seemed to dismiss the shock headline decline and look at better than forecast wage and unemployment figures, but rumours surrounding N. Korean missile tests around the European close saw the market print an inverted hammer on D1 at prior resistance around 94. Yesterday’s trade was quiet due to the Columbus day bank holiday but today’s drop has seen the market move below a rising trendline which could be seen to signal the end of the recent recovery.
The USDIDX has moved below a rising trendline after rejecting prior resistance around the 94 level last Friday. Source: xStation
The decline in the USD has supported Gold with the precious metal trading up to its highest level in 2 weeks after moving back above 1292. This is potentially an interesting level to watch as it was a break above here back in August which led to the strong move higher to its 2017 peak. Tonight’s closing level could be key going forward with a daily close above 1292 further supporting the case for more upside whereas a failure to hold above this level could be seen as a rejection.
Gold is looking to post a 3rd straight day of gains and is testing a prior swing level at 1292. Source: xStation