US Dollar Price Forecast:
- The US Dollar[1] has lost as much as 5.4% in a little less than two months.
- Last week saw the currency push down to a fresh two-year-low; but sellers weren’t able to hold on to the move as prices quickly jumped back to the 93-handle.
- The big question at this point is whether USD[2] bears may have capitulated last week, suggested by the long wick sitting underneath price action on the weekly chart.
- This article incorporates price action to help spot that potential for capitulation. To learn more about price action[3], check out our DailyFX Education[4] section.
Did USD Bears Just Throw in the Towel (for now)?
It’s been a pretty rough Q3 so far for the US Dollar, and with a little over a month to go quite a bit remains unsettled in the backdrop. Next quarter brings what’s expected to be a highly-contentious US Presidential Election, and this will take place as a global pandemic continues to run in the United States. While the impact from the coronavirus was priced-in heavily in February and March, the backdrop since has been considerably less threatening, due in large part to the plethora of stimulus programs triggered by the Fed, the US Treasury and even Congress.
The cumulative effect of all that USD-printing has been a weaker US Dollar; and the Greenback has lost as much as 5.4% in a little less than two months.
While the short side of the Greenback was the focus in the Q3 Technical Forecast for the USD (linked above), few could’ve projected how quickly this would come-in. The question must now be asked as to whether the move is over-extended; and
