Talking Points:
- US Dollar Trades Rebounds From Lows
- Next Week Central Banks Remain in Focus
- EUR/USD Sentiment Remains Extreme; IGCS Remain Extreme at -2.63
In this webinar we discuss the US Dollar and price action for US Dollar based pairs including the GBP/USD, EUR/USD and USD/JPY. Technically the US Dollar has significantly rebounded to conclude this week’s trading. The daily DXY chart seen below is now set to close above its 10 day EMA (exponential moving average), for the second consecutive session. This move marks a significant shift in momentum for the DXY, and if prices continue to rally next week, traders may look for prices to challenge the previous swing high found at 97.78.
New to trading or looking for other strategies? You may enjoy our trading guides
Daily DXY Chart with Averages
(Chart Prepared by Walker England)
With a series of central banks scheduled to release key interest rate data next week, traders should continue to monitor sentiment values for US Dollar based pairs. IG Client Sentiment for the EUR/USD stands out, as it remains at an extreme negative figure. At -2.63 73% of traders are net-short the pair suggesting that the EUR/USD may rally higher.
Sentiment figures for the USD/JPY are also of interest. Currently IG Client Sentiment for the USD/JPY stands at +1.96 with 66% of traders net-long the currency pair. If prices continue to trend lower, traders may look for this value to move towards extremes of +2.0 or more next week. Alternatively, if prices reverse higher, traders may look for sentiment values to neutralize as the USD/JPY trades higher.
Why and how do we use IG Client Sentiment in trading? See our guide.
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--- Written by Walker, Analyst for DailyFX.com
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