U.S. Dollar: Rally May Be Over
InstaForex Group | Jun 17, 2021 03:10AM ET
Yesterday, speculators were really active concerning the euro/dollar pair. As a result, in a short period of time, the quote dropped by more than 115 pips. The slump was caused by the results of the two-day FOMC meeting. The fact is that the regulator is considering changes in its monetary policy and has dropped a hint about a possible rise in the key interest rate.
According to the technical analysis, the market may accelerate, as there is an accumulation process between the levels of 1.2115/1.2130. The trading strategy is based on a break of such levels as 1.2100 and 1.2150, which were extreme points of the price changes on June 15. We can see that the pair broke the level of 1.2100 amid a surge in speculative activity. This allowed traders to enter the market at a reasonable price.
The market dynamic is quite obvious. We foresee acceleration, speculative activity, and influence of a news flow.
Judging by the current price location, we may notice that the pair hit the psychological level of 1.2100 and slowed down.
On the daily chart, the euro/dollar pair slid to the level logged on May 5. Thus, since May 26, the euro has lost more than 2%.
However, the US dollar is locally overbought. As a result, the pair slowed down near the psychological level of 1.2000. If the price fixes below 1.1950 on the four-hour chart, it may fall even deeper. There is a risk that the slowdown may turn into a technical correction.
In terms of complex indicator analysis, we see that technical indicators are providing sell signals on all the main time frames.
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