The US Dollar's 1.3% Gap Down Sparks Fears Of A Slide To $100 - Analyzing The Potential For A Major Currency Shift

• The US dollar experienced a notable 1.3% decline at the end of a week, following a gap down on Thursday.
• In contrast to the dollar's decline, the S&P 500 demonstrated resilience with a 0.3% increase.

The US dollar saw a significant 1.3% decrease in value at the end of the previous week. This drop followed an initial decrease on Thursday, where the dollar opened 0.49% lower than the previous day's closing price and continued to decline throughout the day.

Despite the dollar's downward trend, the S&P 500 had a strong week, with a 0.3% gain on Thursday and an impressive 2.49% gain for the entire week. This contrast demonstrates how various factors can influence currency and equity markets in conflicting ways.

The dollar has been volatile since September 2022. It initially dropped by 13% from its $114 high, then dipped below $100. However, it quickly rebounded from this significant milestone, regaining 7% before experiencing another 4.8% fall.

These fluctuations highlight the difficulties faced by traders and analysts in predicting the dollar's direction, as it has struggled to maintain a steady trend in either direction.

The dollar's recent decline hints at a possible retest of the $100 level, a significant support zone. If the price revisits this area and uses it as support, then a recovery could follow.

If the currency finds momentum for a bounce back and starts an upward trajectory, a key level to watch would be the October high of $107. Breaking above this level could signal a reversal of the current bearish trend and possibly usher in a bull trend for the dollar.

After the closing bell on Friday, December 15, the currency closed at $102.18, trading up by 0.59%.

This article is from an external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.