Currencies: Dollar set to finish below key level for first time since June 2021, signaling its rally could be over

by | Dec 1, 2022 | Stock Market

The U.S. dollar, regarded by many as the financial market’s most sure-fire winner for much of 2022, is having a rough time of late. The ICE U.S. Dollar index
which has steadily fallen for the past month, was down 1% at 104.71 as of late Thursday and on pace to end the day below it’s 200-day moving average of 105.27 for the first time since June 16, 2021. It’s likely to give up a 368-trading-day streak — the longest stretch on record in which the index has stayed above that technical level, based on data going back to 1985. “A lot of traders might use fundamental information to provide them with a directional bias, but often target and exit trades based on the 200-day moving average,” said Edward Moya, a senior market analyst for the Americas at OANDA Corp.

“It’s one of those indicators that traders use to determine trends in the market, and has strong underlying themes for other assets. When you see the dollar break below it, that signals a major turning point for traders that this trend of a stronger dollar is or could be over.”

Source: FactSet, Dow Jones Market Data

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