“Following the Dollar’s explosive rally from 2014 to 2015, it settled into a 20-month consolidation. In the case of the Dollar Index (DXY), this relatively tight range stretched from roughly 92.5 to 100.5. In the frenzied post-election action in the financial markets, the DXY was finally able to break out above the top of its range. And after a brief test of the 100.5 breakout area in early December, the DXY traded as high as 103.82. In recent weeks, however, we have seen it pull back to where it is once again presently testing the 100.5 breakout level,” according to ETF Daily News.
Eurozone political volatility, Brexit aftermath and Japan’s overt efforts to weaken the yen indicate the dollar should remain strong against the euro, pound and yen.
“Should the DXY indeed be successful at holding this level, a longer-term, more significant up-leg is certainly in play,” adds ETF Daily News.
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