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.

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
EUR/USD
Bullish
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
Oil - US Crude
Bullish
Wall Street
Bullish
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
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • The New Zealand Dollar is aiming higher, with NZD/USD eyeing fresh yearly highs while AUD/NZD may be carving out a bearish Head and Shoulders chart pattern. Get your $NZDUSD market update from @DanielGMoss here:https://t.co/osFxXvq5xF https://t.co/sKBkNvMvPz
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/td5WA4hCZC https://t.co/3qXauAsm2Q
  • The Dow Jones and S&P 500 nervously face the earnings season as coronavirus deaths could reimpose lockdowns. The DAX 30 eyes an EU rescue package as the FTSE 100 awaits GDP data. Get your #equities update from @ddubrovskyFX here: https://t.co/A0k6JMMBOg https://t.co/iihbEYsfgi
  • It was a surprisingly quiet week in oil, with the net of this week’s price action showing a doji. But a longer-term formation has built that may open the door to that next trend. Get your #commodities update from @JStanleyFX here: https://t.co/zz6M2ce55V https://t.co/UxlbpgLBkq
  • Why financial market traders must monitor both monetary and fiscal policy? Find out from @MartinSEssex here:https://t.co/Fkzk88Y5gm https://t.co/beKjEODs2y
  • RT @RichDvorakFX: @Investingcom Seems to me like investors ‘high’ on central bank liquidity are fiending for more and staring down the edge…
  • Get your snapshot update of the of relative currency strength and exchange status from around the globe here: https://t.co/DmhBkd4B0k https://t.co/b8RNJQKE1m
  • The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Gain a better understanding of the spinning top candlestick here: https://t.co/yXomAftdv8 https://t.co/wOQAHZVnxB
  • Forex trading, which is the act of exchanging fiat currencies, is thought to be centuries old – dating back to the Babylonian period. Learn about the history of Forex here:https://t.co/ePTJlbUP7c https://t.co/WS2LkCt9gX
  • Two major events will dominate #Euro trading in the coming week: an #ECB meeting on Eurozone monetary policy, followed by an #EU summit to reach agreement on a recovery fund. Get your #currencies update from @MartinSEssex here: https://t.co/wnXjTDizMv https://t.co/tmxDfkgmSv
US DOLLAR Technical Analysis: Who’s Happier? Bears or Central Bankers

US DOLLAR Technical Analysis: Who’s Happier? Bears or Central Bankers

2016-04-20 19:50:00
Tyler Yell, CMT, Currency Strategist
Share:

To See How FXCM’s Live Clients Are Positioned In FX & Equities Click Here Now

Talking Points:

  • US Dollar Technical Strategy: Short Bias Favored Below 11,895
  • 21-DMA Continues To Act As Firm Resistance on Move Lower
  • Macro Environment Shifting To a Dollar Negative Narrative

On Wednesday, the US Dollar bounced rather aggressively. Some thought the move was pre-positioning for a Dovish Draghi, given how strong the EUR has been lately. However, what’s significant is the level that US Dollar has bounced. When you look across the components of the US Dollar Index, EUR/USD, USD/JPY, GBP/USD, & AUD/USD, you can see there is reason to believe we could be around the corner of a turn in the US Dollar.

For now, I won’t hold my breath though. The US Dollar has caught an awfully negative tone from the Fed, which will continue to scare many institutions from bidding up the dollar like we have seen in quarter’s past. If you take a look at WTI Crude Oil, you can see the drop in the US Dollar has helped lift the price of commodities, which will start to work its way into inflation numbers allowing the central bankers to start patting themselves on the back. That being said, Wednesday’s Bullish Day for the Dollar may have a hard time continuing higher.

We’ve Just Hit A Corrective Equality Point with the March 2015 Correction

US DOLLAR Technical Analysis: Who’s Happier? Bears or Central Bankers

On the chart above, you can see that we’ve recently equaled the drop of March 2015-May. I specifically use that zone, and not April, due to my interpretation of the Elliott Wave Count that is labeled. Either way, you can see a channel drawn off the March 2015 highs and May lows brings use to potential support, even if short-term

For now, short-term strength may be realized, but resistance is likely to be found around the 21-DMA. Currently sitting at 11,896. The 21-DMA has acted as reliable resistance since the breakdown started accelerating in early-March. While value traders are understandably looking for something cheap to buy, given the Fed’s narrative and the recent distaste other central banks seem to have for weakening their currencies at the drop of a hat, it appears the US Dollar weakness season is yet to fully turn. A break above the 21-DMA, and further above 12,030 would likely be the first firm indications I was wrong and the support mentioned above was more significant than I realized.

Shorter-Term US Dollar Chart Favors Focus on 21-DMA & 12,030

US DOLLAR Technical Analysis: Who’s Happier? Bears or Central Bankers

If the Elliott Wave Scenario is playing out as labeled on the first chart, we’d expect to see a strong resumption of the US Dollar bull market. If we break below weekly support, 11,787, it’s likely that we’re in for a more material decline. Below 11,787, the next expected support would be the June low of 11,732 followed by the May low of 11,634.

Shorter-Term US Dollar Technical Levels

For those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours.

US DOLLAR Technical Analysis: Who’s Happier? Bears or Central Bankers

Interested In our Analyst’s Longer-Term Dollar Outlook? Please sign up for our free dollar guide here.

T.Y.

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

DISCLOSURES

News & Analysis at your fingertips.