News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/bde30KM8OE
  • The Australian Dollar remains vulnerable to most of its major counterparts, with AUD/USD and AUD/JPY resuming losses. Did AUD/NZD bottom? AUD/CAD may consolidate. Get your weekly Australian Dollar forecast from @ddubrovskyFX here: https://t.co/sjh91mjtXs https://t.co/dGT067zKnH
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/VLZQhrQTAf
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here: https://t.co/Xr3xtoFpZy https://t.co/j5xDAG6LLb
  • While the meetings of central bankers in the US, Japan and the UK will be front, left and center of traders’ minds this coming week, it would be wise not to ignore next Sunday’s German Federal Election. Get your euro forecast from @MartinSEssex here: https://t.co/m920Uvmngm https://t.co/yQYtfHf66s
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/G58J1dg6y3 https://t.co/Dqq9S9vGvo
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqhRoMG https://t.co/lccPTTlvj0
  • GBP/USD’s consolidation could end soon if price breaks out of a symmetrical triangle in play since July. At this time, a downside breakout is likely following the appearance of a death cross. Get your weekly $GBP forecast from @DColmanFX here: https://t.co/WIKdSesfkJ https://t.co/Fx0qr32xgI
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/IRS9MaA7h8
  • The Federal Reserve rate decision is likely to sway the near-term outlook for the price of gold as the central bank appears to be on track to scale back monetary support. Get your weekly gold forecast from @DavidJSong here: https://www.dailyfx.com/forex/fundamental/forecast/weekly/CHF/2021/09/18/Gold-Price-Outlook-Hinges-on-Fed-Rate-Decision-Forward-Guidance.html https://t.co/dWWxtErjK0
Too Early to Call the Bottom: DXY Needs This Level First

Too Early to Call the Bottom: DXY Needs This Level First

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- EUR/USD remains the key driver behind the DXY Index's attempt at establishing a bottom against the 2015-2016 range high.

- JPY-crosses vulnerable heading into Friday's Trump-Abe meeting.

- Keep an eye on short-term positioning shifts with the DailyFX Speculative Sentiment Index.

Yesterday we discussed how the US Dollar (via DXY Index) was attempting to put in a bottom, a veritable turning point after a disappointing start to 2017. And while the key driver remains in place - the Euro and its emerging political concerns, if they're from France or Greece - we still haven't seen enough price development in order to say: "this is the bottom."

Chart 1: DXY Index Daily Timeframe (October 2016 to February 2017)

Too Early to Call the Bottom: DXY Needs This Level First

There are three technical facets of the DXY Index downtrend that suggest that the bottom has not been established yet (chart 1, above). First, DXY has not closed above its daily 21-EMA since January 4. While there have been several attempts for price to climb through this moving average, we've yet to see price put in a close above it; this is a hint from the market that the short-term nature of the market has been, and tentatively remains, bearish.

Second, on the daily timeframe, the Slow Stochastics and MACD have yet to emerge from their bearish territory. While MACD has turned, Slow Stochastics remain in oversold territory; as momentum indicators, we'd prefer to see these on the other side of their neutral/median lines: above 0 for MACD; above 50 for Slow Stochastics. However, on a 4-hour timeframe, we've seen both of these indicators cross into bullish territory, suggesting that a turn may be starting to build.

Chart 2: DXY Index 4-hour Timeframe (January 18 to February 8, 2017)

Too Early to Call the Bottom: DXY Needs This Level First

Finally, on a pure price basis, we haven't seen DXY clear out its most recent swing high at 101.03. When we scale down to a 4-hour timeframe (chart 2, above), the level that marked the high on the January 30 daily candle is actually constituted by a bearish key reversal; this topping candlestick pattern reinforces the notion that the downtrend still has life.

As I prefer to be a bit more conservative with my entries - patience is a virtue, I've been told - waiting for price to move above 101.03 should yield a more confident assessment of which way price will move going forward. Should we see DXY Index clear out 101.03 on a daily closing basis, the odds of a bottom having been established would increase significantly. Until then, there's no reason to be a 'hero' and try to call the low.

See the above video for a technical review of the DXY Index, EUR/USD, GBP/USD, NZD/USD, USD/JPY, USD/CAD, AUD/JPY, and NZD/JPY.

Webinar Schedule for Week of February 5 to 10, 2017

Monday, 7:30 EST/12:30 GMT: FX Week Ahead: Strategy for Major Event Risk

Wednesday, 7:30 EST/12:30 GMT: Trading Q&A

Thursday, 7:30 EST/12:30 GMT: Central Bank Weekly

Read more: DXY Trying to Bottom; Watch EUR/USD, Not USD/JPY

--- Written by Christopher Vecchio, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES