USD slips broadly as markets consolidate – Scotiabank

The US Dollar (USD) is rounding out the week with broad, if limited, losses against the major currencies, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Bull run looks stretched

“The USD’s bull run looks very stretched now. The DXY turned into a one-way street higher at the end of last month. The index has traded unchanged or higher for 14 sessions consecutively now. As I noted earlier this week, these sorts of stretches (i.e., double digit in length) are rare.”

“The index is down today (at the moment) after yesterday’s peak coincided with a test of the 61.8% retracement of the July/September decline and 200-day MA around the 103.8 mark.”

“The USD may not weaken too much at this point—certainly ahead of the US presidential election as things stand at the moment—but additional gains should be a bit harder to come by in the short run at least and the risk of a moderate correction at least is increasing.”