Analysis of the past week

According to the results of the first trading week of September, the US dollar index closed with a significant decrease against a basket of major competitors, which is about 1.2%. The reason for the weakening of the American dollar served as weak data on business activity in the US manufacturing sector and the general rapid growth of optimism. Thus, weak data on business activity in the United States raised fears of a recession and increased the likelihood of stimulating the US economy. At the same time, a decrease in tension in the US-China trade war increased demand for risky assets.

Also at the end of the week, the British pound showed significant growth. This was due to a decrease in the likelihood of a hard Brexit due to the postponement of the final release date. This will allow the British Parliament to compromise on trade relations with the EU and increase the likelihood of Brexit with the deal.

The US dollar index closes the week with a decline near the support levels: 98.20-00, while maintaining the potential for decline, but also indicating a slowdown in the downward trend. So, zone 98.50-98.20 acts as a reversal zone, which may indicate both a continued decline to support: 98.00 and 97.80-70, and a reversal with further strengthening to resistance levels: 98.80 and 99.00.

Fig. The US Dollar Index Chart H4. Current price – 98.20 (10-year government yield bonds – blue line)

Hanzenko Anton