The US dollar turns around

Morning Stock News

Gold  1837,425

EURUSD   1,2075

DJIA  30687,50

OIL.WTI  52,185

DAX   13757

One look at the chart below is enough to scare those who are short the US dollar. Technical analysis tells us that the first support for the EUR/USD can only be seen at 1.16.



Why might the dollar rise sharply?

As an example, we can look at the chart of the S&P 500 index, where a reversal is also visually outlined. The decline of the main US stock index by only 3-5% can lead to a global sell-off in foreign stock markets. Further, there will be a traditional flight to the dollar, which acts as a defensive asset.
Why is the situation in the US stock market so important for the dollar now? The thing is that there are statistics according to which the negative close of January of the S&P 500 index indicates that the same dynamic is likely to continue throughout the year. And given the fact that a large number of stock buyers are leveraged, the situation could get out of control very quickly.
We understand that a similar decline as last spring will not happen. The Fed will come back on stage, reassure everyone and promise to buy a new load of arbitrary, even extremely toxic assets.
Monday is a holiday in the US. Normally when there is no trading in America, during the Asian and European sessions, there are small movements in the EUR/USD pair. It will be all the more interesting to see what happens in the market tomorrow. A sharp downward move and the removal of stops behind the 1.20 mark is possible.

03.00 China Retail Sales for December
03.00 China GDP for Q4 2020
05.30 Japan Industrial Production for November

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.