In this article:
1. Poor consumer sentiment hurts dollar.
2. The greenback finds support on shorter-term chart.
3. Longer-term chart looks bullish.
4. Shorter-term particpants need to sync with longer-term trend
Past performance is not an indicator of future results
Further to Friday's article, the dollar weakened after an exceptionally poor preliminary University of Michigan Consumer Sentiment number. The print came in at 66.8 against a consensus of 72.5. Consumers are worried about rising prices and the prospect of high inflation.
The greenback pulled back in response but has stabilised at the S1 pivot level on the hourly chart on the right. The left daily chart maintains its position of strength between the upper blue and upper red bands. The stochastic has turned bullish as short-term market participants bid price off of the current range's lows. If the EMAs cross bullishly, a swing may be developing. The stochastic remains a key focus - if it is pushed to the 80 level and holds, it may indicate that bulls are generating momentum, i.e. buying into the current dip.
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.