The dollar was sold across the board on rising stocks and signals that the US economy will not be shut again if situation with virus deteriorates
The index price accelerated lower in early US trading on Wednesday, to almost fully erase Tuesday’s gains and signaling that recovery was short-lived.
The price is falling for more than one week, since the double-top was left at 0.9768/78.
Current fall has so far retraced over 50% of 95.68/97.78 rally and cracked key Fibo support at 96.48 (61.8% of 95.68/97.78) which so far contained several attacks.
Close below 96.48 pivot would risk dip towards 96.18 (Fibo 76.4%) and would unmask key support at 95.68 (10June low) hit after steep two-legged March-June fall.
The dollar was on the roller-coaster during the period of coronavirus crisis, advancing strongly on rising uncertainty over the size of negative impact from global lockdown and was heavily sold on growing optimism that economic recovery will accelerate after economies re-opened.
The latest reaction of the greenback could be described as unusual, as rising number of new virus cases, especially in the US, threatening of significant negative impact to the global economic recovery, but traders do not run into safety of dollar and instead continue to sell it.
This could be quite risky game, as traders bet on rising commodities and stocks, which could easily change their direction and catch investors off-guard.
Res: 96.48; 96.73; 97.06; 97.12
Sup: 96.30; 96.18; 96.00; 95.68