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Dollar Index eyes key support after Friday’s bearish reversal

The dollar index, which tracks the greenback’s fee in opposition to majors, is sidelined close to 91.05 at press time.

The greenback’s corrective jump from the Jan. 6 low of 89.21 appears to have ended, Friday’s bearish backyard day candle indicates. The index fell by means of 0.5%, as the US Nonfarm Payrolls posted a partly obtain of 49K jobs in January, pointing to a slower financial recovery.

“The disappointing US jobs statistics may additionally mark the cease of the first section of the dollar’s recovery. A bearish key reversal was once posted when it reversed decrease after making a new excessive (~91.60) for the go and closing under the preceding session’s low (~91.08),” Marc Chandler, chief market strategist at Bannockburn Global Forex and writer of the e book “Making Sense of the Dollar,” referred to in his blog.

The renewed risk-on motion in the inventory markets additionally favors draw back in the anti-risk US dollar.

However, increase differential might also restriction the downside. While the US financial healing appears to have slowed, the Eurozone financial system is contracting due to coronavirus restrictions.

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