Follow-up: Will the USD start recovering or what!?
Hello traders!
I hope you are having a good week. We will follow up on the analysis from a few days ago talking about the recovery or fall of the US dollar. We can see how the market ends up confirming the bullish flag pattern, also breaking the weekly resistance (in blue) located around 1.2200.
It is still possible that we are facing a false breakup before a dump, recovering the aforementioned area as a resistance, so, in case we want to get into some trades, an alternative to reduce risk is to use cost averaging techniques, taking a small operation and increasing it little by little.
In my opinion, while the market remains above 1.2200, the bullish plans will continue to be viable, being able to reach 1.2300 as an initial goal since it is a psychological level, or even carrying out a rally towards 1.2400 - 1.2500, an area in which we have a weekly resistance that hasn't been visited in years.
Regarding the dollar index $ DXY, from our analysis in which we took a look at how it had behaved in recent weeks, we can see how it has simply continued its bearish course. It recently broke the psychological zone of 90.00, however, it is a too recent break to be able to trust it, since, at the time of writing this idea, it has barely pierced it for a few cents.
https://www.tradingview.com/x/nt1X0VpM/ [/ image]
Now, with respect to the fundamental factors that are possibly supporting the weakening of the US dollar, we have a similar scenario to the one mentioned in previous ideas. In short, the US Congress remains silent on the new stimulus packages for COVID-19, resulting in uncertainty, causing the dollar to weaken.
Another point that we must consider is Brexit, since the latest news suggested that the possibility of an agreement between the European Union and the United Kingdom, a situation that has positively affected the Euro and the Great British Pound. However, a no-deal Brexit is still possible, which would bring volatility to the Euro and the Pound, so if we plan to trade these pairs, we must take that into account.
Leave in the comments what you think of this idea and what is your perspective on what is happening in the markets.
Whether you’re gonna sit on your hands and just watch the market or start taking trades, remember to always plan your trades and trade your plan.
Happy weekend folks!
I hope you are having a good week. We will follow up on the analysis from a few days ago talking about the recovery or fall of the US dollar. We can see how the market ends up confirming the bullish flag pattern, also breaking the weekly resistance (in blue) located around 1.2200.
It is still possible that we are facing a false breakup before a dump, recovering the aforementioned area as a resistance, so, in case we want to get into some trades, an alternative to reduce risk is to use cost averaging techniques, taking a small operation and increasing it little by little.
In my opinion, while the market remains above 1.2200, the bullish plans will continue to be viable, being able to reach 1.2300 as an initial goal since it is a psychological level, or even carrying out a rally towards 1.2400 - 1.2500, an area in which we have a weekly resistance that hasn't been visited in years.
Regarding the dollar index $ DXY, from our analysis in which we took a look at how it had behaved in recent weeks, we can see how it has simply continued its bearish course. It recently broke the psychological zone of 90.00, however, it is a too recent break to be able to trust it, since, at the time of writing this idea, it has barely pierced it for a few cents.
https://www.tradingview.com/x/nt1X0VpM/ [/ image]
Now, with respect to the fundamental factors that are possibly supporting the weakening of the US dollar, we have a similar scenario to the one mentioned in previous ideas. In short, the US Congress remains silent on the new stimulus packages for COVID-19, resulting in uncertainty, causing the dollar to weaken.
Another point that we must consider is Brexit, since the latest news suggested that the possibility of an agreement between the European Union and the United Kingdom, a situation that has positively affected the Euro and the Great British Pound. However, a no-deal Brexit is still possible, which would bring volatility to the Euro and the Pound, so if we plan to trade these pairs, we must take that into account.
Leave in the comments what you think of this idea and what is your perspective on what is happening in the markets.
Whether you’re gonna sit on your hands and just watch the market or start taking trades, remember to always plan your trades and trade your plan.
Happy weekend folks!
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.