From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley
Last week, we highlighted the USD testing a critical level against the Rand. This is a theme we've been seeing a lot in a varietyof USD crosses recently and will discuss more in a post later this week.
We’re finally beginning to see some resolutions from these key levels, and they're revealing some very valuable information regarding the Dollar’s strength and the likely future direction for the $DXY Index itself.
In this post, we'll take a look at some examples of this theme by showcasing two forex pairs from Northern Europe that are currently breaking downat major inflection points against the USD.
But before diving in, let's set the stage a bit...
What are some of the major developments in G-10 pairs that are driving the US Dollar Index right now?
Meanwhile, the US Dollar is also testing key levels.
USD strength has become a major market theme over the last couple of months -- along with the potential effects it could have on global risk assets. A strong US Dollar could apply pressure to Emerging Markets, Commodities, and cyclical assets in general. This would challenge the global growth thesis and the rotation into cyclical areas we have seen play out over recent months.