Crude Oil Prices Surge While US Dollar Plummets - What's Next for the Dollar?

[DailyFx]

The October NYMEX Crude oil contract has rallied over 20 dollars while the US dollar has seen its worst single-day performance against the Euro in 7 years—underlining the currency’s strong relationship to oil and other commodity prices. In fact, the year-long correlation between the Euro/US Dollar exchange rate and crude oil prices currently trades at its highest since the inception of the euro. As such, we forecast that US dollar outlook will depend on Crude oil and vice-versa.

Our Forex Buy/Sell Trading Signals currently forecast US dollar declines against the Euro, British Pound, and Canadian dollar, and these forecasts likewise ring true with our own predictions for the US Dollar exchange rate. Three separate automated trading strategies sold the USDCAD, while some of those same strategies bought EURUSD and GBPUSD pairs. These trading signals forecasts are almost entirely consistent with our fundamental forecast for the US Dollar, while our technical outlook for the USD likewise shows risks to the downside.

See more Forex Buy/Sell Signals on DailyFX+ and be sure to monitor any updates on these specific signals, as our automated forex signals can and do change on a daily and intraday basis.

For more information and guides on using our DailyFX Buy/Sell Signals, see our Weekly Forex Trading Strategy Outlook report.