In the near term, the US stock may continually affect DXY, that is to say, the divergence between the US stock and DXY will still be maintained. Therefore, if the US stock continues making corrections this week, USD may be supported against all non-USD currencies. It can be seen from the weekly chart that gold, silver, crude oil, etc, all have fallen in the wake of the recovery in USD. Among the non-USD currencies, only CAD survived with a strong trend. So the near-term trend of CAD seems not to be obvious.
The odds are that the constant correction in global stock markets will
affect the AUD and NZD negatively. On the contrary, the safe haven
currencies like USD and JYP may benefit from it. Therefore, investors
should pay close attention to
CAD and JPY rather than AUD, NZD and EUR this week. In terms of cross
trade, investors should look out for if AUD keeps dropping against JPY.
The reason why EUR is negative this week is that the latest economic
data indicates a slowing economy in Europe, compared with US economy of
high resilience. In addition, European Central Bank official Philip Lane
stated that a strong EUR is expected. And the ECB will hold the
interest rate decision on Thursday. So it worries traders that the ECB
will adopt a dovish measure and even increase the amount of QE following
the steps of the Fed, which explains again its dissatisfaction with the
status of EUR, putting further pressure on EUR and benefiting DXY
directly.
