U.S. Dollar Sank On Monday Price Analysis – 7 Nov 2022
07 Nov 2022
Dollar sinks, sterling jumps as the market turns to risk assets
U.S. Dollar Index is trading down 0.18% at 110.45
The U.S. dollar sank on Monday against the euro and sterling supported by a risk on sentiment and a rally in the European stocks market.
A survey showed on Monday that investor morale in the euro zone improved in November, the first time it rose in three months, reflecting hopes that recent warmer temperatures and falling energy prices will prevent gas rationing on the continent this winter.
In the meantime, the pan European STOXX 600 index rose 0.5% with traders pointing out that investors are still betting China will ease its COVID restrictions, despite officials saying they do not plan an imminent reopening.
Against a basket of currencies, the safe-haven U.S. dollar index fell 0.54% to 110.49. It had lost almost 2% at the end of last week.
Reports that China would make substantial changes to its “dynamic-zero” COVID-19 policy in coming months fuelled a risk assets rally on Friday.
But on Monday the offshore yuan fell 0.8% against the dollar to 7.2347 after China said over the weekend that it will persevere with its “dynamic-clearing” approach to COVID-19 cases as soon as they emerge, giving little indication it would ease its outlier zero-COVID strategy nearly three years into the pandemic.
On technical fronts, U.S. Dollar Index: RSI stood at 39.78 and currently it is trading below 20 and 50 days MA & above 100 days MA. So, the SELL position can be taken with the following target and stop loss: