Euro remains bearish as USD rally continues and Italian bonds steadies

USD Rally contd

The positive technical picture for the USD is much stronger, as market data shows fundamental bullish bias and IG sentiment looming large for USD rally.The FED is looking forward to further price hike, as the US treasury bonds becoming an attractive bidAccording to the market data, USD could proceed a move towards August high of 96.60 and a further rally towards 97 regions is more likely to happen, with support zone is focused at 94.30.Italian bonds are steady for now, yet Euro is continuing its bearish momentum, as the EU commission might again ask Italy to revise their budget plan.

USD technical Analysis

The recent USD rally was increasingly built on the Brexit uncertainty and Italian budget turmoil. As a matter of fact, the USD rally appears to be much more lucrative, as FED is interested in further rate hikes and an FOMC statement was made.

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USD daily currency index

USD Daily currency index

The recent market data shows that the USD could continue to put pressure on other currencies, as no potential upside has yet been seen in any corner of the world.

Further bullish momentum emerging for USD


GBP/USD is breaking below its key support at 1.3010 region and it is now being traded at 1.2975 (GMT 11AM, 23.10.2018). Early in the week, EUR/USD has already broken its key support at 1.1510 region and it is leaning towards testing the October low at 1.1432. A break below 1.1430 could smoothen the slope for EUR to fall below 1.1300.

In Asia, USD/CNH is moving towards to the 2018 high at 6.9586, despite a backup from the Chinese government to support the risky assets. The Japanese Yen may test 115 in near future, as the Japanese government showed very little interests regarding any recent policy change.

AUD and NZD, both are at high risk along with Yen, as AUD is falling downwards and currently being traded at 0.7065, followed by its continuing political turmoil. NZD showed potential risk of losing further ground, despite its improved market data. It is currently being traded at 0.6550 and a fall below 0.6500 regions is more likely to happen.

Bottom Line

Another indication of further continuation of USD rally is its strength in treasury bonds and there is significant chance of increasing capital flow towards USD. Market data shows declining risk for USD sell-off and this might go on for most of the Q4, 2018. At this moment, US Dollar is being traded at 95.50 shattering almost each and every currency and a break above 96.00 region appears only to be a matter of time.

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[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]


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