More downside after all for the USD index? Although DXY has
been on an impressive bullish rally - or stampede rather - it
nonetheless has rallied steadily into previous resistance,
and now has the 200SMA to contend with additionally.
Looking at base USD currency pairs such as USD/CHF,
USD/CAD and USD/JPY, all with the exception of USD/CAD
have already started to drop drastically despite DXY gaining
this week. This may just be a sign of exhaustion, however,
the bearish engulfing pattern on the USD/JPY pair is
slightly alarming even when taking into consideration
that the Yen has strengthened. USD/CAD rallied, however,
mainly due to the drop in oil prices. Also, GBP/USD was
not making lower lows around the 1.33 level as DXY
surged.
To me it seems that there may not be as many rate hikes
after all for the USD and that the recent USD surge was
merely a pre-market reaction of this possibly being the case.
That is all speculation for now, but technically DXY is
reaching resistance and with the help of the 200SMA
might form a double top, thus sending the USD down
further and validating the bearish breakout below the
support trend line.
Personally I don't trade the DXY therefore I have included
no trade setups, however, I use it simply to determine
USD strength.
Happy trading
been on an impressive bullish rally - or stampede rather - it
nonetheless has rallied steadily into previous resistance,
and now has the 200SMA to contend with additionally.
Looking at base USD currency pairs such as USD/CHF,
USD/CAD and USD/JPY, all with the exception of USD/CAD
have already started to drop drastically despite DXY gaining
this week. This may just be a sign of exhaustion, however,
the bearish engulfing pattern on the USD/JPY pair is
slightly alarming even when taking into consideration
that the Yen has strengthened. USD/CAD rallied, however,
mainly due to the drop in oil prices. Also, GBP/USD was
not making lower lows around the 1.33 level as DXY
surged.
To me it seems that there may not be as many rate hikes
after all for the USD and that the recent USD surge was
merely a pre-market reaction of this possibly being the case.
That is all speculation for now, but technically DXY is
reaching resistance and with the help of the 200SMA
might form a double top, thus sending the USD down
further and validating the bearish breakout below the
support trend line.
Personally I don't trade the DXY therefore I have included
no trade setups, however, I use it simply to determine
USD strength.
Happy trading