USD Uptrend Intact: Bulls Watch For A Breakout
Faraday Research | May 15, 2019 02:04PM ET
In the last 30 hours alone, we’ve discussed the outlooks in EUR/USD, President Trump would delay tariffs on EU automobiles.
Turning to the chart, the dollar index broke above previous resistance in the 97.70 late last month, but bulls were unable to maintain that move. Over the past three weeks, the index has formed a “descending wedge” pattern; which despite its name, is generally seen as bullish, especially when it comes in the context of a longer-term uptrend, as we saw on Wednesday.
Source: TradingView, FOREX.com
h3 Breakout Ahead/h3Furthering the optimistic perspective, the MACD indicator is holding in bullish territory above the “0” level, signaling generally bullish momentum. Crucially, the index’s average true range (ATR) has fallen 40% from its start-of-the-year highs. Because market volatility tends to be cyclical, the current low ATR reading could hint at a higher-volatility breakout in the coming days.
As it stands, the chart favors a bullish breakout in the buck and a potential run toward 98.50 or 99.00 from here. That said, a break below Monday’s low near 97.00 would signal that the bulls are losing momentum and could foreshadow a drop toward the longer-term bullish trend line near 96.50 or lower.
Cheers
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.