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Weakness In Equities Boosting Greenback, USD Index Turns Green

  • Renewed pessimism across equity markets is boosting the greenback ahead of Chair Powell’s speech later this afternoon. The USD index briefly printed a new intra-day low following the weaker than expected MNI Chicago PMI, however, dampened risk sentiment has filtered through and sees the DXY printing fresh highs on Wednesday.
  • EURUSD breached a cluster of short-term highs above 1.0390 to print 1.0400 before reversing in line with the broader greenback move. A new daily low was just registered by 3 pips from overnight at 1.0316.
    • Monday’s price action and bearish close highlights a possible top which in pattern terms, is a shooting star candle - a reversal signal. An extension lower would expose key support at 1.0223, Nov 21 low.
  • Worth noting on option expiries for Thursday’s NY cut there is 1.14bn expiring at 1.0300.

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