It has been difficult to get a directional bearing on the USDOLLAR so far this week. In effect, the greenback is showing a sideways bias.
- Monday's candlestick (M) displays a long upper shadow. Bulls pushed priced to the day's high before they lost control to the bears. The bears then pushed price down below the open.
- Tuesday's candle (T) is a spinning top. This denotes uncertainty. Bulls tried to push prices up and bears tried to push prices down, but neither succeeded. The USDOLLAR closed relatively flat on the day.
- Wednesday's candle (W) has long lower shadow. Bears pushed price down to the day's low before they lost control to the bulls. The bulls then pushed price up above the open.
- Thursday's candle (Th) is still to complete. However, it is currently regarded as an inside day. Its high is lower than yesterday's high and its low is higher than yesterday's low. I.e., is it completely inside of yesterday range. This too is a sign of uncertainty.
- All four candles are trading in the USDOLLAR's neutral area between the blue bands.
- The RSI is near its neutral line of 50 (green rectangle).
Volatility has narrowed, with next Wednesday's FOMC meeting on market participants' radar. Next Tuesday's CPI will likely be a driver too. Given that both the RBA and BoC surprised with 25bps hikes, markets are taking note that the Fed could too.
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.