Monday, May 13, 2019

Analysis of the US dollar index... Despite tensions may visit 97.50 again


Despite tensions raised by the US president's decision to impose additional tariffs on Chinese imports and expect a strong Chinese reaction commensurate with the size of the US threat and amid heightened fears of armed conflict in the Gulf region in conjunction with the US threat to impose tariffs on European cars, which appears Donald Trump As the president did not provide any tool to create conflicts with business partners, but the US dollar index did not test levels that seemed logical in those climates such as levels 95 and 96, for example

Looking at the attached chart, we will note that the volume of funds placed in direct selling on the US dollar index has shrunk considerably after leaving the 96.80 areas while shyly trading above the 60-day average and despite all the events surrounding the pair, Which may be interpreted by some as a corrective wave in a descending trend but the return to the levels recorded during the past three months may reflect the picture completely and make us look at the bottom bottom areas as a downward correction wave before resuming the rise
In general, the dollar index is mainly subject to the speculative momentum so we expect to see a rally towards 97.50 areas in the coming hours which will negatively impact the basket of currencies and may cause losses to some pairs and gold, but it will not be heavy and even potential for buyers
Importantly, commodities such as oil continue to suffer despite all these tensions from obvious selling pressures as the major currencies fluctuate, contributing to the bullish momentum on the USD index for a relatively long period.

Trading Recommendation
Buy the US Dollar Index from current areas 97.13
Stop loss below the last recorded low of 96.75
Take the first profit 97.50
Take Second Profit 97.73

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