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US Dollar Technical Analysis: Uptrend Resumption at Hand?

US Dollar Technical Analysis: Uptrend Resumption at Hand?

Ilya Spivak,

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Talking Points:

The Dow Jones FXCM US Dollar Index recovered as expected following the formation of a bullish Piercing Line candlestick pattern. Prices have completed four consecutive days on the upside and now stand poised to challenge resistance capping gains since late May.

A daily close above the 12043-59 area, marked by the May 31 highand the 61.8% Fibonacci expansion, exposes the 12123-49 zone bracketed by the March 12 top and the 76.4% level. Alternatively, a turn back below the 50% Fib at 12008 opens the door for a challenge of the 38.2% expansion at 11956.

On a long-term basis, the trend in the US Dollar has favored the upside since mid-2011. Confirmation of near-term resumption remains elusive for now, particularly considering the hefty dose of fundamental event risk on tap ahead. With that in mind, we continue to hold a passive long position via the USD basket but opt to wait before putting on new exposure for the time being.

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** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.

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

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