Dollar Bouncing On Fed Chair News
USD Rebounding
The US Dollar continues to stabilise ahead of the weekend with the DXY bouncing back off the weekly lows printed on Tuesday. Much of the rebound appears linked to news that Trump will announce his new Fed chair nominee today, expected to be Kevin Warsh. Previously, Trump had been proposing Kevin Hassett who was a clear dove and expected to be easily influenced by Trump. Fears over the independence of the Fed had been a key factor in the bearish USD outlook this year. However, Warsh is seen as a more independent character and has a history of hawkish views, feeding into USD buying today.
Tensions & Tariffs
The bounce in USD is likely also a function of profit taking ahead of the weekend with traders booking profits on the sell-off, particularly given the precarious geopolitical backdrop and a fast-changing news environment. Tensions between the US and Iran remain high after Trump confirmed that he had sent another warship to the Middle East to join the naval assets which arrived last week. The US President also signed a fresh set of tariffs against countries supplying oil to Cuba while also threatening furtehr tariffs against Canada.
Technical Views
DXY
For now, the index remains below back inside the bear channel, capped by the 96.63-level resistance. While this area holds, focus is on a fresh downturn with 94.85 the next support to watch ahead of the bear channel lows. If bulls can break back above this resistance, 98.24 will be the next objective.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.