USDOLLAR shows resilience despite topping pattern


The USDOLLAR is proving to be resilient. Previously we wrote that the greenback had charted a head and shoulders top. However, the pattern has not been completed, with FXCM's USDOLLAR basket still trading above the neckline. Nevertheless, we continue to monitor for the breakdown as this will be a bearish development.

The top chart shows the USDOLLAR, between the bottom blue and red bands. This area is its bearish zone. The longer it stays here, the greater the likelihood of the neckline breaking down. The bottom chart considers the real rate in its neutral zone between the blue bands. If this falls into its bearish zone, the greenback will lose fundamental support, which may be the catalyst for the breakdown.

However, if it moves into its top channel and the USDOLLAR moves into its neutral area, the greenback's resilience will be set to continue. This scenario will be an interesting dynamic given the slowdown in the CPI last week, suggesting another twist to the inflation story.

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.

${} / ${getInstrumentData.ticker} /

Exchange: ${}

${} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.