21 Jan 2015
USD Index sees a short-term correction risk – FXStreet
FXStreet (Barcelona) - FXStreet Editor and Analyst, Omkar Godbole, views USD Index might see a correction towards 92.00-91.50 levels in short-term, and further lists probable reasons for the same.
Key Quotes
“The US dollar has rallied now for more than 7-months due to safe haven appeal, strong domestic economy and a race for looser monetary policies across Asia and Europe amid falling energy prices.”
“Over the past seven months, the USD index has hardly seen a noteworthy correction as the bulls were regularly recharged by the rout in oil prices, monetary stimulus in Japan and Eurozone and increased probability of interest rate hike in the US due to strong labor market performance.”
“The rally was largely driven by non-US factors”
“[..] all of the non-US factors may have been fully priced-in by markets at least in the short-run. Hence a further rally in the USD index depends on Federal Reserve’s timing of the first interest rate hike.”
“The USD index is likely to test 92-91.50 levels in the short-term. The rally is at risk of delay in the US interest rate hike.”
“The index is overbought as per technical indicators. The daily RSI and price chart reveal a negative divergence.”
Key Quotes
“The US dollar has rallied now for more than 7-months due to safe haven appeal, strong domestic economy and a race for looser monetary policies across Asia and Europe amid falling energy prices.”
“Over the past seven months, the USD index has hardly seen a noteworthy correction as the bulls were regularly recharged by the rout in oil prices, monetary stimulus in Japan and Eurozone and increased probability of interest rate hike in the US due to strong labor market performance.”
“The rally was largely driven by non-US factors”
“[..] all of the non-US factors may have been fully priced-in by markets at least in the short-run. Hence a further rally in the USD index depends on Federal Reserve’s timing of the first interest rate hike.”
“The USD index is likely to test 92-91.50 levels in the short-term. The rally is at risk of delay in the US interest rate hike.”
“The index is overbought as per technical indicators. The daily RSI and price chart reveal a negative divergence.”