US Dollar Strength Pauses on Overseas Tensions
|S1: 109.10||R1: 110.25|
|S2: 108.75||R2: 111.20|
|S3: 108.20||R3: 114.00|
As the close correlation of the US Dollar and the US stock market continues, heightened tensions on the Korean Peninsula have paused last week’s US Dollar momentum. The rhetoric between President Trump and North Korean leader Kim Jong-un escalated sharply over the weekend, with the looming threats of pre-emptive strikes unsettling the world markets.
The chart above shows the strong upward momentum of last week has taken a pause in the last 24 hours, retracing back to around the 111.50 level. The Fibonacci retracement drawing on the smaller chart shows the pullback is still somewhat shallow given the large move last week and is finding support at around the 23.6 fib level on the daily chart.
Fundamental news this week will focus on speeches from Fed Chair Yellen tomorrow night, followed by BOJ Governor Kuroda’s speech on Thursday. Traders should look out for the Final GDP figures on Thursday night, as well as the Unemployment Claims which may give traders some indication of the next directional move for the US Dollar.