Expectations on the extent of the dollar downtrend exchange rateDeltafx Admin 16 January 2023
After the release of the consumer price index of the United States and after the expectations of a 25% increase in interest rates last week, traders had no hope for the growth of the dollar, and the sell orders and its supply in the market led to a decline in the value of the dollar against other currencies. Due to the speculation that the Japanese central bank may exit from the loose monetary policy, the currency pair USD/JPY rose significantly. However, the dollar’s appreciation against the Japanese yen is not expected to continue and the trend of this currency pair is expected to decrease again.
The dollar index fell from 144.77 last week to 102.20. From a technical point of view, the break of the moving average of 55 on the weekly chart is a clear downward signal. However, the price is currently in the area of the 50% Fibonacci retracement, and this level can be an important mark for the dollar index.
Meanwhile, the gold price continued its upward movement after the decline in the dollar exchange rate and reached the level of 1900 dollars. The medium-term outlook for this precious commodity is bullish, as long as the support at 1866.94 is not lost.