Dollar index closes to 92.75
The U.S. dollar index
is nearing its technical support target of 92.75, a breakthrough that will open the way to 92.50. Until the pair’s quotes are returned and set above 93.00, the bear scenario remains a priority. Nevertheless, we do not expect a very strong wave of declines to develop, as the USDX will be in a phase of uncertainty ahead of the US presidential election.
As there will currently be no important macroeconomic releases in the US, trade activity may remain moderate. So all the attention of entrepreneurs and investors will be focused on the election race, information about the results of vaccine tests and any information about Brexit.
The previously marked target of 1.1800 has already been reached, without excluding the weakening of buyer activity in the area of 1.1800-1.1830. Further growth is possible if the USD weakens more strongly. At the same time, a fall in the USD can only be achieved if US stock indices recover further.
Recall that the current political power in the United States is profitable to stimulate stock market growth, thus showing the strength and stability of the economy, which in turn will give additional points to Donald Trump in the upcoming presidential election. Given all this, I do not rule out a further 1.1900. Quotations
Par returned to the technical resistance area of 1.2985-1.3000, near which the trendline runs. I will also draw attention to the accumulation of highs over the marked area of resistance. All this significantly reduces the likelihood of a strong wave of growth and as a result of the return of quotations above 1.3160. A bullish scenario can only be implemented if the USD is suddenly very strong or an agreement is reached between the EU and the UK.
Given all this, it expects further creation of a wide sidewall.
The overall weakening of the USD puts pressure on the pair, but the support area of 105.00-105.20 seller activity remains weak. As a result, active sales are still in the high-risk zone. At the same time, setting the pair’s quotation at 105.00 will be the first sign of the willingness of sellers to to continue to fall to 104.40 and further to 104.00.