Gold Silver Reports (GSR) – The US Dollar continues to battle with the 95.00 level, and this most recent test comes with a bit of heightened interest: Last week saw sellers drive below the level only to be followed by buyers pushing off of the August lows into month-end. This came along with a resistance reaction at a big area in EUR/USD. Yesterday saw resistance in USD/DXY at the June and July highs around 95.53, and this adds further questions to the sustainability of US Dollar strength as we move towards the end of Q3.
Despite the US Dollar’s strong showing over the past four months, the currency is still down by -8.5% from last year’s January high. And the major bulk of that bullish move appears to be driven more by fear and risk aversion than monetary policy. The question remains as to which trend will maintain control of USD price action into year-end: Will it be the bigger-picture bearish drive that dominated FX markets last year? Or will the more recent theme of USD-strength take-control to push the US Dollar to fresh yearly highs?
