This week, we recommend paying attention to the American currency index (DXY). During the trading session on Monday, the dollar is testing resistance at 90.50, still holding the potential to renew its multi-year low below 90.00. Traders associate the current recovery of the dollar with a technical correction and recommend using it for more profitable sales.
The pressure on the dollar at any moment may be exerted by the adoption of a new package of fiscal stimuli in the US. Senate Majority Leader Mitch McConnell announced today that Democrats and Republicans have reached a $ 900 billion cross-party deal. The bill now needs to pass the House and Senate vote. Voting in the House of Representatives, where the Democrats hold the majority, is expected to take place today. It is worth noting that the new state aid package will be the second largest in American history, behind only the spring injections of $ 2.3 trillion. The new incentives will include $ 600 in direct payments to Americans, as well as expanded unemployment assistance programs, including an increase in benefits of $ 300 a week.
The Fed is also on the side of the dollar sellers. Last week, the American regulator announced plans to keep the base rate at a minimum until 2024. In fact, this means that the yield on US bonds will continue to remain at near-zero values for the same period of time, depriving the dollar of the opportunity to recoup the losses incurred. Against this background, "short" positions on the DXY remain a priority.
DXY SellStop 90.30 TP 88.00 SL 91.00
Analytical reviews and comments to them reflect the subjective opinion of the authors and are not a recommendation for trading. Author Artem Deev is a trader analyst at AMarkets . The social network of forex traders is not responsible for possible losses in case of using the review materials
