Skip to main content
Home
  • English
  • العربية
  • SUPPORT
  • Log in
  • JOIN EXINITY
  • Markets
    • Markets

    Explore global financial markets

    Individual stocks
    • Stocks
    • Stock CFDs
    Forex and commodities
    • Forex pairs
    • Commodities
    Indices
    • Indices
    • Currency indices
  • Ways to trade
    • Ways to trade

    Explore our services at a glance

    • Exinity World

    Get pure investing simplicity and build a global portfolio from just $20

    • Exinity Trader

    Been trading for a while?
    Say hello to Trader

    • Exinity Trader Pro

    Pro, meet pro.
    The service for experienced traders

  • Edge
    Edge

    The markets are full of opportunity, but you won’t find it by accident. Edge puts useful and jargon-free insight at your fingertips.

    Edge library
    • Understanding the markets
    • Analysis and forecasting
    • Understanding risk and returns
    • Learning from experience
    Trading ideas
    • What our experts say
    • Meet our experts
  • About

What our experts say

Avalanche of central bank meetings could hasten a dollar breakout

Jamie Dutta
Independent Analyst
14.12 @ 11:24 GMT
Jamie Dutta

Three central banks, two tough decisions and a new Covid variant all add to the volatile mix this week. In fact, there are a multitude of meetings in the run-up to the holiday period, eight in the G20 which are all mostly “live”, though it’s a given what the most important one will probably do.

Wednesday’s FOMC meeting is set to increase the taper pace to pave the way for faster rate hikes.

All the focus will be on the “dot plot” with the expectation of at least two hikes next year. The more hawkish projections at the June meeting turned the bearish dollar trend around then. Many believe this will happen again and we see an upside breakout as policy divergence with a more patient ECB kicks in.

Money markets have already moved to price in a quicker taper and more aggressive tightening path from the Fed, but there could be some scope for positive or negative surprises this week. Several Wall Street analysts believe this could include more hawkish language that points to a quicker shift to tighter monetary conditions or a more aggressive move in the dot plot. On the flip side, consensus does seem very bullish, with the main presumption that the Fed looks through the uncertainties of the new Covid variant potentially ripe for a downside surprise.

DXY breakout looks imminent

On the weekly chart, the Dollar Index (DXY) looks to have formed a symmetrical triangle. This continuation pattern suggests that the price will continue to move in the same direction as it did prior. The long-term trend is bullish, having risen from the May lows at 89.52 in a series of higher highs and higher lows.

More recently, after making a cycle top at 96.94, the market pulled back as prices were overbought. Signals such as a daily RSI near 75 and the pair running along and above the upper Ketner band pointed to an imminent retracement.

The index has been consolidating above the midway point of the March 2020 high to the January 2021 low around 96.50. If we get a breakout in line with the long-term dominant trend, bulls will first target a push through 96.94. The June 2020 highs around 97.80 will come into view if we do get a breakout and range expansion after a few weeks of trading sideways. The bottom of the triangle and recent range should offer strong support at 95.51, below the 50% retracement level of 96.56.

Disclaimer: This material is comprised of personal opinions and ideas. It should not be construed as an investment recommendation or a solicitation for any transaction. It does not imply any obligation to purchase investment services, nor does it guarantee or predict future performance. Exinity, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Ready to jump into the markets?

Choose your Exinity experience and create your account in minutes

JOIN EXINITY
  •  
  •  
  •  
  •  
Home
  • About us
    • Exinity Group
    • Careers
    • Company news
    • Meet our experts
  • Useful links
    • Trading platforms
    • Trading tools
    • Trading hours
  • Support
    • FAQ
    • Contact us

The services on the Website are provided by Exinity Limited (exinity.com), regulated and licensed by the Financial Services Commission of the republic of Mauritius with an Investment Dealer License bearing license number C113012295.

Card transactions are processed via Exinity Services Limited (EU merchant company), a company incorporated in the Republic of Cyprus with company number ΗΕ 400404, registered office at 64 Agiou Georgiou Makri, Anna Maria Lena Court, Office 201, 6037, Larnaca, Cyprus and regulated by the laws of Cyprus. Address for cardholder correspondence: [email protected] Business location address: 35 Lamprou Konstantara, Kato Polemidia, 4156, Limassol, Cyprus.

Exinity ME Ltd is registered under the Laws of the Abu Dhabi Global Market (“ADGM”), with registered offices at 16-104, 16 Floor, Al Khatem Tower, ADGM Square, Al Maryah Island, Abu Dhabi, UAE. It is regulated by the Financial Services Regulatory Authority (“FSRA”), Financial Services Permission Number 200015 and is a duly licensed Category 3A Firm authorized to provide financial products and services to persons who meet the qualifying criteria of a Professional Client as defined by the FSRA rules.

Risk Warning: Trading Forex and Leveraged Financial Instruments involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Trading non-leveraged products such as stocks also involves risk as the value of a stock can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. It is the responsibility of the Client to ascertain whether he/she is permitted to use the services of the Exinity brand based on the legal requirements in his/her country of residence. Please read Exinity’s full Risk Disclosure.

Regional restrictions: The Exinity brand does not provide services to residents of the USA, Japan, Canada, Mauritius, Haiti, Hong Kong, Suriname, the Democratic People's Republic of Korea, Puerto Rico, Cuba, Quebec, Syria, Iran, Iraq and the Occupied Area of Cyprus.

© 2021 Exinity

Terms and agreements   |   Privacy   |   Cookies