Will the escalation of the Middle East tension boost the dollar
Macro theme:
- The dollar strengthened after Fed Chair Jerome Powell struck a more hawkish tone last week, scaling back traders' expectations of another 0.50% rate cut at the next meeting.
- The safe-haven demand following the possibility of Middle East escalation boosted the dollar.
- The US Aug JOLTS data showed 329,000 more jobs, indicating a more robust labor market than anticipated.
Technical theme:
- From the 4-hour chart, DXY broke its Wedge pattern and closed above both EMAs with the golden cross. This indicates a potential recovery from its previous sideways-down trend.
- If DXY breaks above 101.33, the index may strengthen to retest 101.80 resistance confluences with its descending trendline.
- On the contrary, DXY may retest 100.90-101.00 before upward movement.
Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness
- The dollar strengthened after Fed Chair Jerome Powell struck a more hawkish tone last week, scaling back traders' expectations of another 0.50% rate cut at the next meeting.
- The safe-haven demand following the possibility of Middle East escalation boosted the dollar.
- The US Aug JOLTS data showed 329,000 more jobs, indicating a more robust labor market than anticipated.
Technical theme:
- From the 4-hour chart, DXY broke its Wedge pattern and closed above both EMAs with the golden cross. This indicates a potential recovery from its previous sideways-down trend.
- If DXY breaks above 101.33, the index may strengthen to retest 101.80 resistance confluences with its descending trendline.
- On the contrary, DXY may retest 100.90-101.00 before upward movement.
Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness
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