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Dollar ends the year on the wrong foot

EURUSD Tech analysis by Simon Kazinsky on 10:57 December 29, 2017 EST

The dollar is about to give in its major long term support against the Euro as 2017 comes to an end.

The European single currency is not particularly strong when compared with its counterparts and commodities. The same can not be said about the buck, showing weakness across the board and falling below medium term supports in the charts. Its performance is particularly poor against Gold, oil and the pound.

The USD index broke below its long term supporting moving average so unless a bounce happens on the first week of the year the outlook will remain bleak for most traded currency in the world. It currently trades at 92 but could seek to test previous resistance in the region of 83 to 85 before -or if- a new leg up. This would mean a drop of around 10% for the index and would imply the Euro/USD could reach as high as 1.30 in the first months of 2018.

Being unable to cross the 1.20 mark would obviously question all the above and EURUSD falling below 1.15 would indicate the dollar has reignated.

Retail traders are piling shorts on EURUSD with a 70/30 ratio, a good sign that paired with the technical analysis being dovish on USD for the time being is the way to go.