HomeContributorsTechnical AnalysisDollar Index Stabilizes 7-Day Bearish Strike Near 2-Year Lows

Dollar Index Stabilizes 7-Day Bearish Strike Near 2-Year Lows

The US dollar index (futures) found a bottom around an almost two-year low of 93.40 after a seven-day bearish strike, which put the market back on a negative path.

While the Stochastics and the RSI in the four-hour chart signal that the market has reached the edge of the oversold territory as the indicators move upwards, the index has now a long way to go to cross the 97.77 border and hence eliminate fears of a down-trending market. The strenghthening MACD oscillator is also pointing to some improvement in the near-term. In the meantime, however, intermediate obstacles could make the path rocky.

The 20-period simple moving average (SMA) could be the first to stop upside movements around 94.20. Then, the rally could stall within the 94.76-95.10 restrictive region, which encapsulates the 50-period SMA, before all attention shifts to the descending trendline stretched from the 97.77 peak. A decisive close above that line could trigger a more aggressive upside move towards the 200-period SMA currently at 96.43.

In the event the bears remain in charge, driving the index below 93.40, the sell-off could extend towards the 92.53 key support zone.

Summarizing, the US dollar index is probably preparing for an upside reversal, and the 20-period SMA at 94.20 could be there to quickly terminate any attempt higher.

XM.com
XM.comhttp://clicks.pipaffiliates.com/c?c=231129&l=en&p=0
XM is a fully regulated next-generation financial services provider of online trading on currency exchange, commodities, equity indices, precious metals and energies, with services to clients from over 196 countries worldwide. Founded in 2009 by market experts with extensive knowledge of the global forex and capital markets and with the aim to ensure fair and reliable trading conditions for every client, XM has reached international recognition by virtue of its unbeatable execution of orders, spreads as low as zero pips on over 50 currency pairs, gold and silver, flexible leverage up to 888:1, and personalized customer engagement to foster clients’ success.

Featured Analysis

Learn Forex Trading