FxWirePro: Much lucidity, not much manifestation in dollar weakness, DXY registers third consecutive declines

The USD weakness that started after Donald Trump’s press conference continued all through the day yesterday.

We aren’t sure whether Donald Trump's presidency proves beneficial to FX markets or stocks or not, his press conferences are likely to make for exciting market swings.

Much lucidity, not much manifestation: A few days to reflect on the possible implications of a Trump Presidency for the US, the rest of the world and the European political landscape hasn’t really done much to fill in the holes in our knowledge about what President Trump implies, relative to what Candidate Trump said.

The minutes of the December FOMC meeting, in which US policy rates were raised to 0.75%, showed that potential expansionary fiscal policy under President-elect Trump was discussed. As such, members indicated that upside risks to growth had increased. This was tempered, however, by uncertainties about what the fiscal policy impact will be, as well as the impact of the stronger dollar on the US economy.

While the dollar index (DXY) seems edgy at this juncture but senses strong support at 101.71 levels. To our surprise there seem to be no lingering doubts as to how reliable the news we are being told by the Trump camp are.

Technically, the whipsaws evidences slumps below DMAs, more bearish rout on cards after bearish DMA crossover & bearish thrusting pattern, both leading & lagging indicators signal bearish momentum (see daily chart).

After long legged doji the current prices slid below 7EMA, selling interests mounting backed by momentum (refer weekly plotting).

Treasury yields and the US dollar fell following the FOMC minutes of the December meeting.