3June, 2020No Comments|| 2
In the past few days, there was a possibility of the USD becoming a safe haven due to global tensions that have been sparked by the US/China word war, US riots and looting, and overall global economic issues. However, global assets seemed to have rallied as the USD slides allowing risk-on assets like the GBPUSD and the AUDUSD to gain.
Cause of Global Rally
The most probable cause of the global rally is because of high liquidity. The major central banks as well as the governments have enough cash from their economic stimulus programs aimed at starting up economic growth and stability.
The dollar reversing is also a big cause of such a global rally. Due to the fundamental factors that have affected the USD in the past weeks, this currency, typically seen as a safe haven, has a low demand.
DXY Technical Outlook
As of current, the USD Index is trading at 97.48 with its long term movement in a range having broke out of the 200 EMA in the daily timeframe. At the same time, the lower timeframes suggest a strong downtrend that doesn’t seem to be letting up anytime soon.
Alternative Assets to Look At
The AUDUSD and the GBPUSD are two currency pairs that have seen quite exceptional performances in the past few days.
For the AUDUSD, it is currently trading at the level 0.68800. After a strong upward movement, it seems to have hit a ceiling at the 0.68900 level pushing the price lower. We can start seeing some short term downtrend movement leading to some pretty good short opportunities although a full reversal is still in question.
The GBPUSD, in the short term, is still experiencing a pretty strong uptrend. However, there is a ceiling somewhere between the 1.26500 to 1.27000 levels that may halt the upward movement. While it hasn’t reached there yet, there can probably some long opportunities to look for in the higher lows as entry points.
Information on this page are solely for educational purposes only and is not in any way a recommendation to buy or sell certain assets. You should do your own thorough research before investing in any type of asset. Learn to Trade does not fully guarantee that this information is free from errors or misstatements. It also does not guarantee that the information is completely timely. Investing in the Foreign Exchange Market involves a great deal of risk which may result in the loss of a portion or your full investment. All risks, losses and costs associated with investing, including total loss of principal and emotional distress, are your responsibility.
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