At press time, the U.S. Dollar Index that tracks the safe-haven currency against a basket of major currencies was down by0.10% to trade at 90.032 index points.
Currency traders are currently having a precarious time, placing their bets on the U.S dollar at least for the midterm, as it has been exhibiting a ping pong scenario since the start of this year, taking to account the opening weeks of 2021 currency trade and over the past seven weeks, the greenback has been going back-and-forth as seen in its price action.
U.S Dollar bulls are currently fighting the battle of their lives in keeping the DXY at least above the key support mark of 90.00 where sits the key 2020-2021 support line.
Such strong psychological support pegged at 90.00 is where the DXY bears seem to draw an impending battle with the DXY bulls.
Recent price action suggests a breakdown below that key support level will likely open the gates for the bears to take hold of the USD market, which could probably move towards the 2021 lows around 89.20 support areas ahead of the three years low at 88.94 index points.
That being said, ruling the U.S dollar bulls could come at a heavy cost in spite of sentiments showing the global economy seems to be gathering momentum, as recent macro sighted yesterday revealed the greenback recorded significant gains as global equities, crypto-assets plunged amid waning risk appetite.
Still, a significant number of economic pundits anticipate currency traders will start moving back to the U.S Federal Reserve Bank narrative, and that could be interesting as most global central banks have been on autopilot since their quick responses to COVID-19.
As each central bank will have no option than to recalibrate its respective policy, in a world where the U.S Federal Reserve has highlighted plans in allowing the world’s largest economy to run hot.
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This article was originally posted on FX Empire