Yesterday, the US dollar index (USDIDX) fell to its lowest level in five months, with similar declines noted against the euro. The dollar's weakness stems from rising investor expectations of potential interest rate cuts in the US in the upcoming year 2024. However, market movements may be exaggerated due to low liquidity during the holiday season. The recent downward trend in the dollar was further compounded by a drop in Treasury yields, particularly the 2-year yields, which reached their lowest level since the end of May.
From a technical perspective, looking at the chart, we can see that the current declines have halted around the 100,000 point mark. This area has twice served as a turning point on the chart this year, marking local troughs in January and April. Only in July of this year did the USDIDX manage to break below this barrier. However, the movement was quickly reversed, and the rates fell only to 99,400 points before returning above the 100,000 level. Therefore, the current level will be crucial in determining whether the current downward trend will continue or if we will see a correction at the beginning of the new year. In the case of a correction, the levels to watch are 101,936 and 102,884, which represent the 23.6% and 38.2% Fibonacci retracement levels, respectively. In the case of a continuation of the downward movement, the first level worth observing is this year's local trough, around 99,400 points.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Source: xStation 5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
