- Summary:
- The US Dollar index has been rejected by key resistance at the 94.62 level as the first Presidential debate begins between President Trump and Joe Biden.
The US Dollar index has been rejected by key resistance at the 94.62 level as the first Presidential debate begins. President Trump and Democrat nominee Joe Biden will battle it out in the first televised debate between the pair. Investing Cube has a dedicated page on the U.S. election with the latest odds on the likely winner. The ATFX Q4 Market Outlook also discusses the potential effects on the market from the race.
The US dollar may see volatility following the first debate, depending on how traders have already priced-in the chances of each candidate. The prediction market currently sees a 10% higher chance for Joe Biden, so a strong showing from Trump could see that change, with their differing views on taxes and foreign policy leading to a market adjustment.
The week ahead will also see a packed economic calendar for the dollar, with PCE inflation numbers and ISM manufacturing on Thursday, followed by Non-Farm Payrolls data on Friday. Friday will also see an update on Eurozone inflation and this will also have an effect on the index due to the high Euro weighting.
The dollar rally in September was driven by the belief that selling had been overdone with traders expecting further U.S. stimulus and a pause on Fed policy. The renewal of talks on another $2.2 trillion stimulus package has led to the selling in the dollar this week and this will be another development to watch. Congress has been unable to agree on the contents of the latest bill and it’s not certain that a package will be approved ahead of the election on November 3rd.
US Dollar Index Technicals
The US Dollar index has been rejected by the 94.62 resistance level, which provided support in the mid-March sell-off. The US Dollar now has to find support or see a continuation of the recent downtrend. There are a few support candidates on the way to the 50-day moving average near 93.25. A close below that could see the downtrend resume. The ATFX Q4 Market Outlook is now available for download. Please find it here.
US Dollar Index Daily Chart
