The First Few Days Of July Should Be Good For The USD
Alpari Research & Analysis | Jul 03, 2017 07:30AM ET
USD cannot be happy with the second part of the last month. Since the 20th of July, the price was falling sharply. At the very end, in the last few days the drop stopped and buyers are trying to pull out a correction. In our today's analysis we will describe the situation on the Dollar Index, which can be useful for every trader aiming to trade any pair with the USD.
From the technical point of view the latest decline was caused by a nice head and shoulder pattern, which had 97.10 as neckline. This support was broken on the 27th and caused huge troubles for the demand. It seems that the situation is changing now and we got under the influence of the iH&S formation. It is a bit smaller than the mentioned H&S but still influential and significant.
So the latest trading pattern is suggesting us that we should climb higher. How much higher? 38,2% Fibonacci seems like a reasonable resistance here. Not only because of the Fibo itself but also because of the lows from the 14th of July.
To wrap that up, in the mid term, the most probable scenario is the price aiming higher - USD should be stronger. In the same time, the long-term scenario stays negative and so far we do not have grounds to think otherwise.
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