USDOLLAR continues to consolidate in longer-term pattern

  • USDOLLAR
    (${instrument.percentChange}%)

USDOLLAR Weekly Chart


- FXCM's USDOLLAR basket continues to consolidate in a sideways symmetrical triangle (green converging lines).
- Last week's candle (blue arrow) is a spinning top. This is a candle of uncertainty – bulls tried to take the USDOLLAR up, bears tried to take it down, but the basket closed relatively flat for the week.
- The basket is trading above its black 30-week EMA, but the EMA is yet to turn up.
- If it does turn up, it may suggest that the USDOLLAR is preparing to breakout to the upside of the symmetrical triangle.

USDOLLAR Daily Chart


- There is an element of shorter-term support for the USDOLLAR.
- The basket is attempting to keep its position in its daily bullish channel between the upper blue and red bands.
- The daily RSI remains on the bullish side of 50 (green rectangle). The longer it maintains this position, the more underlying support for the greenback.

Comment

  • Liquidity will likely be light over the next two days, given tomorrow's US Independence Day celebration.
  • It is not surprising that there is support on the daily chart.
  • The hawkish comments by Fed Chair Powell last week at Sintra confirmed the recent dot-plot projections of two more hikes for 2023.
  • ISM manufacturing index is the key focus today, while the services survey release on Thursday is also important due to a larger-than-expected drop in May.
  • Jobs figures for June will be published on Friday, and based on Powell's recent comments, a significant weakness in the data would be necessary to consider a change to July's interest rate hike.
  • The June FOMC minutes will be released on Wednesday.
  • The dollar may gain support throughout the week as market participants find more justifications in the data and minutes to align with the more hawkish dot plot projections.

Trade the News: View our Economic Calendar

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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