fbpx

Andy’s Technical Take Week of November 11th 2019

The U.S. dollar gained strength versus all major currencies this past week. As far as the distribution of the greenback’s demand, it was smooth among its peers. I decided to have a closer look at the U.S. dollar index to identify medium- and short-term technical sentiment as many traders are trying to gain a grasp on this.

A squeezed daily chart below shows the greenback’s uptrend since May 2018. Before adding any technical indicators, I wanted to draw a couple of trendlines and get a graphical analysis.  Until June 2019, the blue dashed line acted as a support trendline as bearish retracements were limited exactly by that line. In the last four months, that line acts as a magnetic median line, attracting average daily prices. The green median line formed in the same period, but it has a much sharper slope, so its sustainability is under question. Nevertheless, the current rate is below both lines, which should point to a slower pace of growth.

After testing the year-to-date peak on October 1 (99.67), DXY dropped more than 2.5%, counting from the peak to recent low. Such a sharp decline in just one month cannot be considered a simple retracement. So some analysts had decided that the greenback already reversed the long-term uptrend. However, given the speed of the recent upside swing, it would be too early to conclude the king’s death. On the other hand, DXY had just come back to average rates, considering the long-term median value. Further trend’s direction is not so clear as it might seem.

Andys-Technical-Take-Week-of-November-11th-2019-JunoMarkets-JunoInsight-1

Another version of the daily chart setup below shows that long-term exponential moving averages did not cross each other yet, although the index appeared below the EMA144 quite deeply. The same story happened during bearish retracements in January and June 2019, and every time the greenback was coming back to the uptrend after them. Other indicators are in favour of the bulls as well. MACD lines performed the bullish crossover and the histogram turned positive. 13-day RSI crossed the 50 threshold from below, changing the sentiment to bullish. There might be a comeback to support curves previously breached (EMA34 and EMA89), however, such a bounce would only confirm the bullish formation on MACD and RSI, gaining another chance to long the greenback for those traders who missed the recent rally. 

Andys-Technical-Take-Week-of-November-11th-2019-JunoMarkets-JunoInsight-2

Parabolic SAR, Average Directional Index and the BullBearTrend indicator provided a buy-signal simultaneously last week. The only concern might be that the ADX main line is headed south towards the threshold, but that might be related to its lagging nature. Still, the momentum is strong and the surplus is bullish. Therefore, I do not see any reason for the greenback to decline in the week ahead from a technical point of view.

Best wishes in the market this week traders!!

Andys-Technical-Take-Week-of-November-11th-2019-JunoMarkets-JunoInsight-3

This post is contributed by MyFxLab. MyFXLab provides daily technical analysis written by professional traders. The site was founded by former Goldman Sachs FX traders and executives from some of the world’s largest brokers.

To view more premiere technical content and become a member, visit www.myfxlab.com

No Comments

LEAVE A COMMENT

Your email address will not be published. Required fields are marked *

Recent post

JUNO MARKETS All rights Reserved.

Juno Markets Limited is incorporated in the Republic of Vanuatu with a registered address at Law Partners House, Kumul Highway, Port Vila, Vanuatu and regulated by the Vanuatu Financial Services Commission (VFSC) with a Principal’s License (No. 40099) for dealing in securities.

Juno Markets does not accept clients from certain countries/regions including the United States and Hong Kong. For a full list of restricted countries, please contact Customer Service.

Risk warning

Our services include products that are traded on margin and carry a high degree of risk to your capital. It is possible that you could sustain a loss that exceeds your initial investment. You should ensure you fully understand the risks involved and seek independent advice if necessary. Please read our full risk disclosure statement.

Juno Markets aims to deliver the best FOREX, CFD, AND METALS TRADING environment for traders WORLDWIDE. Juno Markets offers many PARTNERSHIP OPPORTUNITIES for INTRODUCING BROKERS, MONEY MANAGERS and WHITE LABELS, and our unique PARTNERSHIP PROGRAM helps IB’s grow their business through insightful data analysis and marketing support. We believe in bringing the best service, support and trading environment to FOREX, CFD and spot gold and silver traders GLOBALLY, allowing them to TRADE THE GLOBAL MARKETS on our METATRADER 4 PLATFORM. The Juno Markets MT4 platform offers unrivalled execution quality traders OF ALL LEVELS.

Processing...
Thank you! Your subscription has been confirmed. You'll hear from us soon.
ErrorHere