The Dollar Index is on the back foot during early Wednesday trading. Recently, the dollar trade has been conditioned by two opposing views: some believe that the recovery in the United States will outpace that of other major economies, and therefore be conducive to dollar strength; while others see the prospect of a solid global economic rebound later in the year is likely to cause dollar weakness due to the unwinding of the safe haven trade. Right now, the optimism generated by the prospect of massive monetary and fiscal stimulus running alongside each other seems to be weighing down on the dollar, especially since the publication of a disappointing US jobs report that gave those advocating the case for a strong greenback reasons to reflect.
Investors are still buying every dip in the price of oil. Both major benchmarks, WTI and Brent, are in a clear bullish trend, as investors are betting on a fast economic recovery once the vaccine allows restrictions to ease. Furthermore, any news on more fiscal or monetary stimulus will generate fresh optimism and trigger a new rally.
From a technical point of view, WTI is testing the strength of the resistance placed at $58.40-$58.50, while we have a similar scenario on Brent, but with the level at $61. A clear climb above these thresholds could open space for further recoveries. Vice versa, prices could pause for breath after the rally of the last few trading sessions.
Carlo Alberto De Casa – Chief analyst, ActivTrades
Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
