The Greenback Revival, USD Gains versus GBP, EUR, CAD, and Yen
After months of underperforming, the greenback is one of the top-performing currencies gaining versus GBP, Euro, CAD, and most of the currencies forming part of the USDX basket. Most pairs are skewed in favor of the USD from the daily chart, printing bear reversal patterns from monthly peaks marking a correction and end of last year's.
Admittedly, the USD's success will heavily weigh on the future of precious metals in 2021. Despite the USDX price action leaving bulls on the altar time and time again—falling in and out of love with traders, there are similarities to historical patterns that favor bulls in the immediate term. A sharp gain of USD prices from spot rates would undoubtedly heap immense pressure on gold and precious metals, bearing further implications to ancillary sectors.
Impact on the USD Price:
Bullish. The USDX could bottom-up from current levels and recover following 2017 and 2018 patterns when the USD fell before rallying in 2018, inflicting damage on USD bears.
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