FXTM information and reviews
IronFX information and reviews
Libertex information and reviews
FXCC information and reviews
FxPro information and reviews
OctaFX information and reviews

Dollar stays tight, building up strength for breakout

13 July 2021

Moderately positive stock market dynamics yesterday was combined with a slight 0.1% increase in the dollar index to 92.2 after two days of decline from 92.8. The Dollar Index is now near the upper end of the converging trading range since last October. Also, a pullback is forming on the daily charts after touching the overbought area of the RSI index.

Therefore, the short-term technical picture is now on the side of the dollar bears, suggesting a further correction after last month’s rally. Also, falling long-term bond yields are playing against the dollar. In contrast to last week, this move is increasingly linked to easing inflation fears and central bank actions pushing interest rates, including 120bn monthly Fed purchases.

At the same time, it is worth separating the short-term momentum from the longer-term trend. The latter could well be on the side of the dollar as the US economy recovers more strongly, and the Fed could prove to be the flagship of monetary policy normalisation.

Globally, the dollar has remained without a pronounced trend, forcing a closer look at the latest extremums. A firm break beyond these levels would be a signal for a further move in the breakout direction.

Short-term downward momentum is more plausible, causing us to look closer to the 200 SMA, which passes through 91.35. A decisive break below this level would open the way towards 89.60, the lower boundary area narrowing the trading range. Only a break of this area would revive bets on a global multi-year dollar decline.

The US advance on the stimulus rollback and solid economic growth leaves a moderately bullish scenario for the dollar on the table, whereby a pullback of the DXY to the 200-day average would once again attract buyers.

A slight pullback in the dollar might draw the buyers, ending a long consolidation by breaking through the upper 92.7 range boundary. A break-up will be confirmed by a move above 93.4 (previous peak area). The balance between the bulls and the bears is very tight due to the pandemic heightened uncertainty. However, traders and investors should note that a prolonged consolidation leads to a compressed spring effect: the longer the range is compressed, the stronger the subsequent trend in the direction of the breakout will be.




The EUR/USD Price Prediction 2022. The Bulls or the Bears, Who Will Prevail?
The EUR/USD Price Prediction 2022. The Bulls or the Bears, Who Will Prevail?

Euro/US Dollar (EUR/USD), for which we will provide the price forecast for the year 2022, is the most actively traded currency pair on the foreign exchange market, also known as Forex or FX...

26 Nov 2021

The Euro's oversold is a sign for more volatility to come
The Euro's oversold is a sign for more volatility to come

The Euro fell against the dollar to 1.1200, a new 16-month low, having lost more than 4% in the last four weeks. The downward trend in the single currency accelerated...

26 Nov 2021

EURUSD is knocked out again
EURUSD is knocked out again

After testing another “bottom”, the major currency pair is consolidating. EURUSD continued falling and tested another low yesterday; right now, it is consolidating....

25 Nov 2021

EUR/USD seems vulnerable near multi-month low
EUR/USD seems vulnerable near multi-month low

The EUR/USD pair remained on the defensive through the Asian session and was last seen trading around the 1.1270-65 region, just a few pips above a 16-month low touched on Friday...

22 Nov 2021

EUR/USD snaps two-day rebound near 1.1350 as USD tracks firmer yields
EUR/USD snaps two-day rebound near 1.1350 as USD tracks firmer yields

EUR/USD stays pressured around an intraday low of 1.1352, down for the first time in three days ahead of Friday’s European session. In doing so, the major currency pair reacts...

19 Nov 2021

The greenback dominates the market
The greenback dominates the market

EURUSD stopped falling on Thursday, but investors are still interested in the “greenback”. The major currency pair slowed down its decline and is trying to reach stability...

18 Nov 2021

HotForex information and reviews
XM information and reviews
FXCM information and reviews
AvaTrade information and reviews
LegacyFX information and reviews
FP Markets information and reviews
FP Markets

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.