The Dollar index ended little changed at 95.60 on Monday as investors awaits August Non-Farm payrolls due by the end of this week.
The Euro extended its losses and fell by -0.10% yesterday, the British pound edged lower and has lost -0.22% while the Japanese Yen plunged to reach 3-week high against the Dollar at 102.40 as rate hike bets increased significantly following Yellen recent Hawkish comments in Jackson Hole last Friday.
In equity markets, the DowJones closed 108points higher and S&P500 was up 0.5%. In the meantime, Gold managed to recover from 5-week low of $1315 per ounce while Oil prices retreated by nearly 2% on Monday to settle at $46.98 on surging OPEC output.
As of today, few economic releases were scheduled in the both the European and U.S trading sessions, however, we have seen some big movements in the FX market.
Beginning from Europe, German Import price index came out above expectations at 0.1% in July while it was anticipated at -0.1% only. In the meantime, inflation contracted in August as both the MoM and the YoY figures missed forecasts and registered 0.0% and 0.4% compared to estimates of 0.1% and 0.5% respectively.
In the U.K, mortgage approvals decreased to 60.9K down from 64.2K previously while the net consumer credit saw a deterioration in July as the figures showed a decrease by 1.2b against 1.9b in June.
In the U.S, the consumer confidence index jumped to 101.1 up from 96.7 previously and above estimates of 97.0
The U.S Dollar resumed its recovery today as the Dollar index added +0.40% at the time of this report to trade at 95.97 level, which is considered as a major resistance in the near-term. Therefore, traders should focus on prices reaction around the 96.00 handle to confirm the bullish reversal signal given on Friday.
Technically, a break above this resistance should expose 96.25/50 area in the coming days, and from where strong sellers may appear. From a larger perspective, the Dollar keep trading sideways in the weekly chart, as investors remain skeptical about the date of the next interest rates hike. Consequently, volatility can persist in the near-term unless we see a clear break above 97.65 peak or below 93.00 weekly support.
Meanwhile, we can see that bulls managed to preserve the higher lows structure that began from 92.95 low, which may lead to further gains in the Greenback especially if a daily close above 96.50 level happens.