It happened! Dollar eventually ended the two months sideways trend that has been going on since the middle of November. As we expected in our yesterday’s analysis of the EURUSD, it happened with the help of the CPI data. Yesterday, we talked about the EURUSD, today, let’s check the situation on the general Dollar Index.

Here, we had a pennant formation (green lines), which in theory should be a trend continuation pattern and promote the breakout to the upside. Reality hit this instrument differently and the price broke it’s lower line. That was a first crucial support to be broken thanks to the CPI print. Second one was the mid-term up trendline (blue), which was connecting higher lows since the end of May. Breaking those two should be enough to claim the bearish victory.

I have one problem to give this victory away just like this and this problem is the horizontal support on the 94.6 (orange). As long as we stay above, Dollar buyers can still have hope. Yes, breakout of this line will be the end of the USD strength in the mid-term but as long as this line holds, we still cannot claim full bearish victory.


About Author

During his career, Tomasz has held over 400 webinars, live seminars, and lectures across the globe. He was also an academic lecturer at Poland's Kozminski University. In his previous work, Tomasz initiated live trading programs, where he traded on real accounts, showing his transactions, providing signals and special webinars for the accounts; none of which were ever negative. Tomasz gives preference to a technical approach to trading: mainly price action with very strict money management rules. He believes that the most important thing in trading is your mind, so it is much better to focus on trading psychology than to look for the Holy Grail of trading systems.

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