RJO FuturesCast

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Currencies

U.S. Dollar Futures Look to Weaken Further

Posted 01/02/2020 2:05PM CT | Ian Bannon

U.S. dollar futures traded nearly 40 points higher on the first trading day of the new year. It appears that the oversold condition is being corrected, however the overall pattern in the dollar index is still extremely bearish. The Federal Reserve’s repurchase package is clearly pressuring the greenback as lower highs and lower lows take shape on the chart. The euro holds the most weight against the dollar index, constituting 58% of the weighing followed by the yen at 14%. Therefore, I believe these two currencies have the most to gain should the sell-off in the dollar continue. The daily chart pattern of the euro indicates a bottoming process is in place. President Trump is set to sign the phase one China deal on January 15th, which could help support the dollar. Furthermore, US interest rates remain more attractive relative to other countries. So the dollar will likely put up a fight before moving significantly lower, but the momentum is adamantly negative at the moment.

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Ian Bannon

Market Strategist
Ian’s interest in trading began with the stock market after graduating from Purdue University with a degree in Economics and a focus in international business. A natural strength for numbers, trends, and pattern recognition, in conjunction with a curiosity to understand the big picture has enabled a desire to understand market behavior. Ian managed his own stock account before moving into the futures arena because of the wide scope of trade-able sectors and the ample amount of fundamental support behind these larger-scope markets.
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