US Dollar Price Outlook:
US Dollar Reversal Continues
The US Dollar reversal has continued through another day and the entirety of the Labor Day breakout has been entirely erased. The USD[2] caught a significant bid to close out last week amidst a low-liquidity backdrop ahead of the long weekend in the US. That theme of strength continued through the Sunday open, even showing a small gap in DXY[3]; and buyers continued to push through the Monday holiday. But since US traders have returned to their desks, a bit of reckoning has taken place as the entirety of that Friday-Monday ramp has been erased. Yesterday saw the Greenback’s descent pause in a zone of prior resistance; but that could merely slow down the move as sellers went back on the attack earlier this morning to push down to another fresh low. [1]
Tomorrow brings Non-Farm Payrolls out of the US and this theme will be on center-stage; and this is in front of a rather important economic calendar for the next two weeks as next week’s ECB leads into the following week’s FOMC[4] rate decision. Both banks are expected to loosen policy: The bigger question is by how much, and what else they might have in store for later in the year.
On the US Dollar – the next notable area of support runs from 97.86-97.94, followed by the prior yearly high at 97.70.
US Dollar Two-Hour Price Chart
Chart prepared by James Stanley; US Dollar on Tradingview[5][6]
EUR/USD Morning Star Continues
On a similar note, the EUR/USD put in a vicious move ahead of the long weekend, finally dropping below the 1.1000 handle after posturing around 1.1100 for the better part
