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.

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
EUR/USD
Bullish
Oil - US Crude
Mixed
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
Wall Street
Mixed
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Real Time News
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/jmcAIW4w5k
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/M9isuvnzqF
  • The British Pound is giving back some of its multi-month gains with some pairs testing notable support despite a positive fundamental backdrop. Get your market update from @nickcawley1 here: https://t.co/6Ct5R0H41F https://t.co/c4rXmMjMrv
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5cVYOn https://t.co/4dhCP5pnxM
  • Gold is facing the neckline of a Double Bottom Pattern after bouncing off a confirmed longer-term trendline. Is a bullish reversal in order? Get your market update from @FxWestwater here: https://t.co/kLXZewWBMd https://t.co/w1Nu0z569m
  • Central banks often deem it necessary to intervene in the foreign exchange market to protect the value of their national currency. Learn how central bank intervention can impact your trading here: https://t.co/8G8mUX4so6 https://t.co/Gn41XsGktg
  • Rollover is the interest paid or earned for holding a currency spot position overnight. Learn how to earn rollover interest on your open positions here: https://t.co/SRsG8CxjEn https://t.co/2AR1qgx0tz
  • The New Zealand Dollar is in a tricky spot. On one hand, rising stocks can propel NZD. On the other, a dovish RBNZ ahead could cool bond yields as the government tackles soaring housing costs. Get your market update from @ddubrovskyFX here: https://t.co/5rjm2gr3EL https://t.co/aLwhWHMPqz
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/obH0RFLKhC
  • It was a big Q1 for $USDJPY but so far Q2 has been a far different tone. Which side will prevail? Get your market update from @JStanleyFX here: https://t.co/TxlD3zoglZ https://t.co/rUQnokAx30
US Dollar Technical Analysis: Big Test At Long-Term Resistance

US Dollar Technical Analysis: Big Test At Long-Term Resistance

Tyler Yell, CMT, Currency Strategist

US Dollar Index (DXY) Key Points:

  • The ONE Thing: The approach to 95 on the chart aligns with the long-term resistance of the 200-Week Moving Average and Ichimoku Cloud on the weekly chart. Long-term resistance on long-term charts can help traders get a broad context for what is happening in the market. Additionally, a break above long-term resistance can show a broad shift in market sentiment that could be worth your attention in identifying new trends worth following and not fighting.
  • As the Trade War rages, the US Dollar appears to be the default currency as the US Economy continues to outperform other economies as evidenced by the Federal Reserve holding a more hawkish view where they raise rates to tame possible inflation as other central banks remain in the offensive mode to stoke inflation.
  • Technical Outlook on the US Dollar: The bears in the US Dollar Index (DXY) have few legs to stand on while bullish arguments continue to compile. Whether looking through the lens of Ichimoku, Elliott Wave, Andrew’s Pitchfork, or MACD (there are more) the prudent approach seems to favor further US Dollar Index gains.

Can US Dollar Strength Continue?

In a trek through the FX world, you will see few currencies are holding gains against the US Dollar. The currencies that continue to outperform the US Dollar look to trade in a corrective pattern. The corrective pattern is Elliott Wave-speak for against trend moves.

The one currency I have in mind is the USD/MXN, which has retraced after significant weakness leading up to the AMLO election. However, other or most currencies have not fared so well.

Look to the USDCNY, and you continue to see the trade war (er, disputes) continue to breed CNY weakness while the landscape for further US economic outperformance seems firm. Recent US data has been strong and financial conditions remain easy while US saving rates are strong and banks are set to use over 100% of their net income to pay dividends and buy back stock. Not necessarily an argument for impending doom and gloom on the back of negotiating tactics of the current administration.

Unlock our Q3 forecast to learn what will drive trends for the US Dollar through 2018!

Technically Speaking – US Dollar Meets Long-Term Resistance

Please add a description for the image.

Chart Source: Pro Real Time with IG UK Price Feed. Created by Tyler Yell, CMT

Yikes. That’s a busy chart. Let’s break it down.

From the starting point at the left of the chart, you can see we’re in a seven-year uptrend that began in 2011. We saw a sharp spike in H2 2014 that saw a higher high in January 2017 before appearing to base in Q1 2018.

The question that I’d love answered (as it’d increase the probability of future FX trades) is whether or not the US Dollar will break through the resistance level of 95 that includes the weekly Ichimoku Cloud & the 200-week moving average.

There are a few technical developments that have me favoring a continuation through resistance at 95. First, the MACD is showing a bullish reading. This, in and of itself is not fully sufficient, so I also like that Fibonacci level that price bounced off at the 161.8% expansion at 89.47. The sharp move off this level, earlier this year tends to be the genesis of a new trend.

If the price breaks strongly above 95, and then 95 is eventually tested/ treated as support, then I would be confident in saying we’re likely to move toward the January 2017 high before we break below the 2018 low.

A break below 91.60 would make me think that 95 may have been the highest price we’ll see for some time, but for now, this is a secondary/ non-primary view.

New to FX trading? No worries, we created this guide just for you.

MORE SUPPORT FOR YOUR TRADING:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts for Q3 have a section for each major currency, and we also offer an excess of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our popular and free IG Client Sentiment Indicator.

---Written by Tyler Yell, CMT

Tyler Yell is a Chartered Market Technician. Tyler provides Technical analysis that is powered by fundamental factors on key markets as well as t1rading educational resources. Read more of Tyler’s Technical reports via his bio page.

Communicate with Tyler and have your shout below by posting in the comments area. Feel free to include your market views as well.

Discuss this market with Tyler in the live webinar, FX Closing Bell, Weekdays Monday-Thursday at 3 pm ET.

Talk markets on twitter @ForexYell

https://www.dailyfx.com/forex/fundamental/article/special_report/2018/07/28/Effects-of-the-Trade-War-Two-Key-Markets-Being-Hit-the-Hardest-.html

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

DISCLOSURES