Watch this Symmetrical Triangle in USDOLLAR for the Next Move
- EURUSD rangebound between $1.0710 and $1.1050 since March 20.
- See the April forex seasonality report.
The weak March US Nonfarm Payrolls report on Friday initially spurred weakness in the greenback in illiquid markets, but as participation has returned, the net effect has been negligible. The USDOLLAR Index is back to its levels ahead of the release, while EURUSD and USDJPY have given back their post-NFP moves entirely.
Now, as EURUSD and GBPUSD continue to consolidate in steady ranges from the past few weeks, the broader USDOLLAR Index is exhibiting signs of a potentially bullish chart pattern on the H4 timeframe: a symmetrical triangle during an uptrend.
Despite the onslaught of negative headlines regarding US growth, and the market pricing out a Fed rate hike to as far as January 2016 (per the fed funds futures contract implied probability), the greenback seems to be weathering the storm for the time being. This may have serious implications for various USD-pairs over the coming weeks, even if April has been the worst month for the buck during the QE era.
--- Written by Christopher Vecchio, Currency Strategist
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