USDOLLAR Momentum Down As Yields Decline

The momentum of the USDOLLAR has declined over the course of the week. We can see this by the convergence of the green 5-day EMA towards the orange 10 day EMA (green ellipse). Moreover, the RSI has moved closer to 50 (red rectangle). As markets capitulated this week we note the bottom chart of the US 2-Yr note i.e. the yield has dropped markedly (blue rectangle). This reflects a renewed expectation by the market that the Fed will be forced to cut rates in 2020 more aggressively than initially forecast. Cuts are now expected in April, June and December. However, the greenback is showing some resilience. Today's candle (still to complete) looks like a bullish hammer (green arrow). As such we continue to monitor and if the green 5-day EMA crosses below the orange 10-day EMA and the RSI drops below 50, these will be considered as bearish developments.