Solid bullish march in the dollar index testing the 14-year record high

Due to the Christmas holiday, the financial market has ceased it volatility to a greater extent and currently most of the pairs are exhibiting sideways movement. In the last Wednesday, the dollar strongly rallied high in the global economy and pushed all its major rivals down in the market. The green bucks have gained the immense amount of strength in the global economy after Mr. Trump become the U.S president. In his victory speech he announced that they are going to increase the fiscal spending in the next year and tax cut policy will be implemented to ease the hardship of the U.S citizen. After this shocking statement from the newly elected U.S president, the overall consumer sentiment turned extremely bullish in the market and the dollar gained its first strong bullish strength in the year 2016.

The second boost of the green bucks was created in the market after the FED hiked their interest on the basis of 25 points and most importantly FED chairperson Janet Yellen has also stated their three possible rate decision in the next year. Such two strong event in the global economy gave the dollar a significant amount of strength in the global market and made the green bucks broadly stronger against its all major rivals. Prior to the Christmas holiday, the market exhibited an extreme level of low volatility as most of the traders are currently staying on the sideline and enjoying the holiday season. However, in the last week, we have seen some decent movement in the EURUSD and GBPUSD pair and the range traders made a good profit out of that volatile market. Most of the professional traders are currently waiting for the New Year to start a fresh trading year the market will again become volatile due to the active participation of the full-time professional traders.

The strength of the US dollar is measured in U.S dollar index and it’s the measure of the current strength of the green bucks in the global market against the six major currencies in the world. After hitting the 14 years high in the global market the U.S dollar index slipped from its peak but in last week it gains near about 0.5% in the market and traded at 103.50 level. In the eyes of trained professional, the U.S dollar index might hit the 14 years high in the next year which is at the 103.62 level.

This level is going to provide a decent bearish pressure the U.S dollar index and most of the traders are thinking that the solid bullish mark of the U.S dollar index will be able to break this resistance level in the very beginning of the next year.

However, some of the traders are thinking that the current strength of the U.S dollar has been faded away to a great extent and they are currently waiting for the bearish retracement to sell the green bucks in the market. But selling the green bucks at the current level will be extremely risky since there is very downside potential for the green bucks in the next month of 2017.Though the green bucks traded lower against the Japanese yen after the recent fall in the U.S dollar index from its 14 years high but in the last trading session, it managed to gain its bullish momentum in the market.

The USDPY pair gained near about 0.2% in the market and traded at 117.64 level and currently, the traders are thinking that the pair will against test the critical resistance level at 118.65 level in the next month. But before taking any trade in the market the professional traders will be extremely careful since the overall market sentiment is mixed at the current moment.

Due to the recent turnaround from the green bucks, the EURSUD pair dropped by 0.65% in the forex market and traded at 1.0352 level. This level is extremely important since this level is now acting as the key support level for the Euro in the market after it breached its 13 years low in the market. On the contrary, the Great Britain pound tried for a bullish recovery in the forex market after the Brexit loss. But the mighty U.S dollar pushed the Great Britain pound towards a fresh low in the market. The GBPUSD pair was down by 0.5 percent and traded at 1.2206 despite the low volatility of the forex market. There has been a significant improvement in the U.S economy in the last two months and the mighty dollar has gained near about 6 percent in the global economy after the U.S presidential election.

Most importantly the dollar remains broadly supported in the next year since Janet Yellen announced their three projected rate hike. The currency pair gains significant strength in the global market when the current interest rate is increased on a regular basis. And if the FED manages to hike their interest rate for at least two times than the dollar will become broadly stronger against its all major rivals in the forex market. Moreover, the central bank will also look for at least two rate hike from the FED before the month of November to adjust their current inflation rate. To be precise, the U.S dollar is pretty strong both fundamentally and technically in the global market but still some of the leading currency analysts is thinking that there might be a small bearish retracement in the green bucks in the next year.