Dollar steadies as risk selloff starts up again

Safety flows are helping support the dollar and yen in European morning trade as risk sentiment turns sour again, with SandP 500 futures now down around 0 points, or 1.0%. The dollar was earlier lower but recovered from losses and is now only marginally lower against the euro and kiwi, while USD/JPY was up 0.5% against the yen at 137.00. Separately, GBP/USD rose around 1.2220 in Asia, but has now fallen sharply to 1.2175 after an attempt at a rally this week was strongly rejected. Here is a technical picture. GBPUSD The price has now broken below the August highs of 1.2276-93 and below the 50.0 Fib retracement level of last year’s downtrend seen around 1.2306. The weekly chart shows a better picture of the technical situation: GBPUSD When you combine this with a dovish Fed and a tighter BOE, the fundamentals are now working with the technicals and this could lead to a big reversal lower. the next couple. Added to this, of course, is risk selling, where the pound tends to fall victim so late due to the high beta correlation. In any case, the dollar is finding decent ground today as stocks face further pressure – which may look like it will get worse before it gets better.

Ethan Andrews

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