2017 was rough for the USD. The beginning of 2018 does not look any better but there is a chance for the USD buyers to at least take a deep breath or a break, before falling even deeper. In the past few days, USD is doing all it can to stop the recent depreciation. Although they are far from the success, the demand made some advancements to at least stop the price from falling. In our today’s analysis, we will target the Dollar Index – DXY, which shows the global sentiment towards the Greenback.
The most recent drop started here on the 9th of January when the price bounced from the neckline (blue) of the mid-term head and shoulder formation (yellow). After that, we broke the lows from September (green) and went significantly lower. Why can we see a bit of bullish hope here? Well, on a daily chart, the price created two daily candles with long tails, which are signaling us that the area around the 90.3 can be potentially a good support (light blue). In our opinion, there is a chance for a positive beginning of the week here.
The positive approach for the USD is so far only in the short-term and is present only as long as the price stays above the light blue area. The first target here is the mid-term purple down trendline and the next one is the green horizontal area around 91.7.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis
This article was originally posted on FX Empire
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