Currencies 1 MIN READ

Dollar could drop below a widely watched major level

November 25, 2022By Reuters

Nov 25 (Reuters) – The US dollar remains vulnerable and seems poised to drop below a widely watched major technical level for the first time in many months. That would likely cause a big spike in dollar sales.

The dollar stood close to a three-month low and was headed for a weekly loss on Friday, as the prospect of the Federal Reserve slowing monetary policy tightening as soon as December preoccupied investors and kept risk mood buoyant.

The USD index, which tracks the dollar against a basket of six other currencies, looks set to slump under the 200-DMA at 105.316 for the first time since June 2021.

Fourteen-day momentum remains negative, reinforcing the underlying bearish bias. A daily close under the 200-DMA and the November 105.30 base would unmask the 104.474 Fibo, a 76.4% retrace of the 101.29 to 114.78 (May to September) rise.

The USD’s fate is pinned to the movement of the biggest components of the index: the euro, yen and pound.

(Martin Miller is a Reuters market analyst. The views expressed are his own.)


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