The main market’s drivers

In the European session on Wednesday, the main driver of the market was the strengthening of the dollar index against a basket of competitors. The reason for the strengthening of the American dollar against European currencies mainly, was the information that in the US a briefing on safe borders would be held. The briefing is expected to reach a compromise on the budget for the construction of the wall on the US – Mexico border, which previously threatened to the US government partially shutdown.

As a result, the US dollar index repeated its rapid growth at the start of the year, having received support from the reduction of political risks in the United States. Thus, the US dollar index updated a high of 96.70, thereby indicating the formation of a correction after the American dollar’s decline at the end of 2018, which, in turn, is limited by overbought and resistance 96.70-80. In conditions of low liquidity and reduction of political risks in the United States, 97.00 resistance test is possible, but a significant strengthening of an American dollar will be limited by its overbought.

The US dollar index chart. The current price is 96.80 (10-year government bonds yield is the blue line)

Read also: “Market activity depending on the days of the week”

Andre Green

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