Dollar Index Overview and EURUSD GBPUSD USDJPY
Warning: Most of the readers may find this article unnecessary and boring. We prepared this analysis for the traders who like to have a plan and view on their trading activity.
In this analysis, we want to take a look at the medium, long-term roadmap of the USD, which follows the winds of FED’s rate hikes in parallel with the recovery of economic data in the US.
There are six components in the Dollar Index basket:
EUR WEIGHT 0.576 JPY WEIGHT 0.136 GBP WEIGHT 0.119 CAD WEIGHT 0.091 SEK WEIGHT 0.042 CHF WEIGHT 0.036
EURO: Dovish ECB and no rate hikes earlier than the first quarter of 2019.
STERLING: Brexit uncertainties and Carney who was unable to convince the market of the continued interest rate hikes despite the 25bp rate hike from the BOE.
YEN: The BOJ, which reduces its growth forecasts and 2020 inflation forecasts
So, three main components of the basket do not give positive signals.
Technically:
Weekly Chart:
After the decline that started with the 2008 crisis, DXY completed base formation and started to move up. At Fibo 61.8, completed the correction and continue to rise.
The Measured Move Up formation will be completed with the breakout of 103.90 and in this case, we can speak much higher levels in the dollar index.
Daily Chart:
The inverse SHS pattern formation is remarkable and I expect the increase in the dollar index to accelerate with the breaking of 95.50 resistance.
On the 4 Hours chart, we see an ascending triangle formation, and formation will be completed by the breakout of 95.50 resistance.
Conclusion:
Although DXY is stuck in a triangle and it needs new catalysts to go higher, longterm or midterm, it gives the signals of higher levels after the consolidation.
After the possible breakout of 95.50, we expect the index to meet 96, 96.50, 99.20 and the target of the formation 102.40
When 103.90 is broken, the scenario will completely change.
Shortly; despite Trump tweets, trade wars and upcoming US elections, as it’s been said, “Dollar is still the King”
In this analysis, we want to take a look at the medium, long-term roadmap of the USD, which follows the winds of FED’s rate hikes in parallel with the recovery of economic data in the US.
There are six components in the Dollar Index basket:
EUR WEIGHT 0.576 JPY WEIGHT 0.136 GBP WEIGHT 0.119 CAD WEIGHT 0.091 SEK WEIGHT 0.042 CHF WEIGHT 0.036
EURO: Dovish ECB and no rate hikes earlier than the first quarter of 2019.
STERLING: Brexit uncertainties and Carney who was unable to convince the market of the continued interest rate hikes despite the 25bp rate hike from the BOE.
YEN: The BOJ, which reduces its growth forecasts and 2020 inflation forecasts
So, three main components of the basket do not give positive signals.
Technically:
Weekly Chart:
After the decline that started with the 2008 crisis, DXY completed base formation and started to move up. At Fibo 61.8, completed the correction and continue to rise.
The Measured Move Up formation will be completed with the breakout of 103.90 and in this case, we can speak much higher levels in the dollar index.
Daily Chart:
The inverse SHS pattern formation is remarkable and I expect the increase in the dollar index to accelerate with the breaking of 95.50 resistance.
On the 4 Hours chart, we see an ascending triangle formation, and formation will be completed by the breakout of 95.50 resistance.
Conclusion:
Although DXY is stuck in a triangle and it needs new catalysts to go higher, longterm or midterm, it gives the signals of higher levels after the consolidation.
After the possible breakout of 95.50, we expect the index to meet 96, 96.50, 99.20 and the target of the formation 102.40
When 103.90 is broken, the scenario will completely change.
Shortly; despite Trump tweets, trade wars and upcoming US elections, as it’s been said, “Dollar is still the King”
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