Dollar Takes A Plunge; Where Will It Land?

Lior Alkalay - Contributor - Forex

Undoubtedly, this February will be remembered as painful for the dollar. Investors have long awaited the opportunity to short the greenback after a prolonged period of steep gains. When US growth came out surprisingly weak, FX traders pounced, taking the dollar on a brutal roller coaster ride.

Then we had Janet Yellen’s testimony, which suggested banks should be prepared for negative interest rates. Many considered that a hit below the belt as investors were betting on more rate hikes. So now, they’ve got to get ready for negative interest rates? No one was prepared for that remark, despite Yellen’s suggestion that it was only a remote possibility. Of course, now, the million dollar question is, how low can the dollar go?

Short Term Dollar Outlook

As with all corrections, the first catalyst is always about momentum. The question of whether that will lead to a wider correction is fundamental. But what about the imminent target? That’s driven by technical momentum. So what do the technicals say?

Daily Chart of the U.S. Dollar Index
Chart courtesy of

As seen in the Dollar index chart above there are two key levels in this correction. The first is our resistance level at 100. The Dollar index has been attempting to break this level for a while now, though without success. When the Dollar index failed, it was really only a matter of time before the correction would come. And so as it did. Continue reading "Dollar Takes A Plunge; Where Will It Land?"

Are Investors Secretly Turning Bearish On The Dollar?

Lior Alkalay - Contributor - Forex

Less than two weeks into 2016 and history has already been made. This January will go down in the record books as Wall Street’s worst in decades. China is losing control, the Middle East is boiling over and the Emerging Markets are in dire straits. All of which has led stocks to shed more than a trillion dollars in value.

It’s the classic boiling-to-the-brim pot which suggests we’re ready to push the dollar higher, right? Instead, dollar strength has really been rather tame which, on the face of it, is quite puzzling. That is unless investors have secretly been turning bearish on the greenback. The question is, are they? Continue reading "Are Investors Secretly Turning Bearish On The Dollar?"