Last week when the Dollar index broke out of an ending pattern, it should have seen a strong rally, but for the 9th time it failed to get past the 20-week and 20-month averages. This keeps open the possibility that a larger triangle is forming. Below the recent low of 79.27, the last support exists at 79 levels (double bottom) and 78.62 levels. If the US dollar index closes below 79, it would head to 75-74.5 levels. On the up side, if the price holds the 79 levels and breaks above the 81 level, then the extreme bullish factors will strengthen in the coming days towards higher levels. Note in 2007 even after US stocks had started to decline, the dollar index was declining in March. So a falling dollar is not always bullish, though it does mean money moving out of US equities to other assets like commodities or EMs.
Currently, the trading patten is set between 79-81 levels. Either side breakout will give a boost for bigger/lower new targets. The levels between 79.36-79.27-79 are the best buying zone with closing sl 78.6. We recommend to buy above levels.
The material has been provided by InstaForex Company – www.instaforex.com
Last week when the Dollar index broke out of an ending
pattern, it should have seen a strong rally, but for the 9th time it
failed to get past the 20-week and 20-month averages. This keeps open the
possibility that a larger triangle is forming. Below the recent low of 79.27, the last support exists at 79 levels (double bottom) and 78.62 levels. If the
US dollar index closes below 79, it would head to 75-74.5 levels. On the up
side, if the price holds the 79 levels
and breaks above the 81 level, then the extreme bullish factors will strengthen in the
coming days towards higher levels. Note in 2007 even after US stocks had started to
decline, the dollar index was declining in March. So a falling dollar is not always
bullish, though it does mean money moving out of US equities to other assets
like commodities or EMs.
Currently, the trading patten is set between 79-81 levels. Either
side breakout will give a boost for bigger/lower new targets. The levels
between 79.36-79.27-79 are the best buying zone with closing sl 78.6. We
recommend to buy above levels.
The material has been provided by InstaForex Company – www.instaforex.com
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