FXCM's USDOLLAR has charted a lower peak followed by a lower trough. This is a defined down trend.
The basket hasn't broken the pattern of peaks and troughs in the last three weeks. The greenback is still in downtrend. A rally above 12,987 (green horizontal) will break this paradigm.
Last week's candle is a spinning top. This is a candle of uncertainty. Bulls and bears tried to take price up and down, but both were rejected, with price closing relatively flat on the week.
The RSI also remains on the bearish side of 50 (green rectangle), although it is nearing a crossover point.
We cannot dismiss the possibility of a trend change. The Fed will be worried about the stickiness of inflation. Rate hikes are still the order of the day. This means that the green horizontal is certainly susceptible to being taken. However, despite all the hawkishness since the blowout NFP release, the greenback is yet to show definitive signs of primary trend strength.
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.