Dollar: What will be the short-term trend?

We recognize that the dollar’s rate of increase has been habitual and unsustainable. We anticipate a period of consolidation, potentially agitated, which was clearly made clear by the reversal of the short-term trend at the end of last week, when the US currency suffered one of the biggest setbacks in almost a year.

Not only because of the Federal Reserve’s speech to raise interest rates this year, but also because of the indications that the balance sheet is likely to start dropping in 2016. Furthermore, we are seeing that the trend of American monetary policy is to ‘hold on’, while at the European Central Bank – ECB and Japanese Central Bank – BOJ it is ‘to facilitate’, that is, to create incentive structures for new investment flows. However, the projection on the currency market is always very complex and subject to changes that challenge the best economists.

For those looking at the market with a short-term view, the EUR / USD approaching $ 1.1045 is much more a corrective action than a trend reversal. The Pound looks weaker than the Euro and failed to end the week above the psychologically important $ 1.50 point. Like the Euro and the Pound, the JPY also appreciated against the dollar last week and looks ready to test the 119.30 support point that protects the downside. On the positive side, the USD / JPY quote at 121.20 appears to offer formidable resistance. Finally, the Australian is in a stronger technical position than the Canadian Dollar.