The dollar forms a strong bearish signal

The dollar index Bloomberg broke its September-December upward trend, as the weighty index elements – EUR and JPY – climbed higher at night, pulling the index below its key support; the close with a break on Thursday will confirm the formation of the peak near the 200-day moving average and will focus on the November low at 1156. BBDXY loses 0.40% today to 1163.
Two key points of reference, which can be singled out:
* the end of November at 1167, which was tested in early December and which turned into support during the rollback caused by the release of the consumer price index in the US and the decision of the FOMC at the rate of December 13
* Trend support for September / December at 1165.
The dollar continues to decline on Thursday after the yield of 10-year US government bonds. Soon, the statistics on the US labor market will become known. Analysts expect that the number of initial applications for unemployment benefits in the US for the week ended December 23, decreased by 5 thousand compared to the previous week and amounted to 240 thousand. The recent decline in the yield of 10-year US government bonds continues to put pressure on the US dollar. “Smoothing the yield curve of US government bonds suggests that the market is not particularly enthusiastic about the prospects for growth in 2018, despite the signing of a tax reform,” says MUFG strategist Derek Halpenny. The dollar did not notice that President Donald Trump signed a tax reform law last Friday that will become the largest in the US since 1986. Its key innovation is the reduction of the corporate profit tax from 35% to 21%.

Leave a Reply

Your email address will not be published. Required fields are marked *