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Dollar to conclude year as winner

Article by ForexTime

The heightened expectations of higher US interest rates in 2017 has fuelled the Greenback’s market shaking appreciation this quarter with the currency on route to conclude the year as a champion amongst majors. Sentiment remains firmly bullish towards the Dollar and such was observed on Tuesday when the Dollar Index lurched to fresh 14 year highs above 103.60 despite the holiday season liquidity. With the economic calendar quite thin on Wednesday, price action may dictate where the Dollar trades with intraday bears exploiting a break below 103.00 on the Dollar Index.

Much attention may be directed towards Thursday’s US GDP report which could provide further clarity on the health of the world’s largest economy. A strong release above the 3.3% forecast could install Dollar bulls with enough pre-Christmas inspiration to send the Dollar Index to fresh 14 year highs.

Currency spotlight – EURUSD

Prospects of higher rates in the U.S have triggered record capital outflows in Europe consequently reinforcing the EURUSD parity dream. While the heavily discussed Euro parity dream may not be achieved in 2016, the divergence in monetary policy between the ECB and the Fed could provide enough encouragement for bears to send the pair lower in 2017. Uncertainty still remains the name of the game when dealing with the Euro which could ensure the currency remains depressed moving forward. Technical traders could observe how a strengthening Dollar pressures the 1.035 support with a strong breakdown opening a path to parity (1.000).

Commodity spotlight – Gold

Gold edged lower on Tuesday with prices hovering around $1133.50 as the strengthening Dollar capped upside gains. With markets expecting higher US rates in 2017 and the Dollar set to appreciate further, Gold could find itself vulnerable to heavy losses. As the year slowly comes to an end traders may observe how the metal reacts to the intraday $1125 support which if broken could open a path lower towards $1115.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), 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 as to any loss arising from any investment based on the same.

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About Louie Lewis

Louie Lewis
Successful forex trading starts with you first. Then comes the actual strategies and techniques. I have been involved with forex and forex trading for a few years now. It is a wonderful way to build wealth. The learning never stops and I want to help others along their journey into this wonderful market of opportunity.

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