DXY: Market Overview

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The leading indicator has already pointed out exhausted bullish. Technically talking we all can see dxy has extended a lot high due to some past week greenback power over most of its counterparts. Last week it was an almost risk-off market situation where safe haven did most well and the case dollar been dragging most of its counterpart creating some bullish momentum on dxy. The situation doesn't seem well for dxy bulls at this point when we saw a bearish engulfing candlestick pattern which indicating bearish momentum gradually increasing at the market. To consider properly we know how pound, euro, Aussie (mainly) and kiwi trying to lead over greenback at the moment and overall market risk sentiment changed when NY trader entered the market. I assume if the market player avoids risk aversion and gets nasty over chasing risky assets then counterparts of greenback may perform well especially those comdolls and which will eventually help dxy bears to drag the price further lower. Technically we can see stoch did hang around a couple of times in its overbought zone but finally it leaves the 80 zone!

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If the January retail sales figures manage to beat expectations, it could support speculations that the U.S. economy could stay resilient despite global economic problems. This could mean another leg higher for the Greenback and may have a positive effect on dxy.

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It looks like market watchers aren’t exactly expecting impressive consumer spending figures to start the year! Both headline and core reports are projected to post 0.3% gains, slower than the earlier increases.

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Powell say Fed is prepared to lower rates and deploy QE if there is a downturn

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"Putting the federal budget on a sustainable path when the economy is strong would help ensure that policymakers have the space to use fiscal policy to assist in stabilizing the economy during a downturn," Powell told the House Financial Services Committee in semiannual testimony.