Dollar strength is an ominous signal
Read full post at forexlive.com
Yesterday’s dollar rally hit resistance, today it broke through
The rally in the US dollar yesterday stalled at some key levels but today it has broken through.
Specifically, EUR/USD has fallen to a seven-week low in what’s starting to look like a topping pattern:
Another notable break is in AUD/USD as it sinks below the September low in the third day of declines.
I still haven’t seen enough to have confidence in a dollar bounce but we’re clearly at an inflection point in a market that’s off balance. The reality of the second virus wave in Europe is undoubtedly a factor and Japan may be intervening so signals may be skewed but every pip higher in the dollar increases the probability of a squeeze in the crowded short-USD trade.