FX TECHNICAL ANALYSIS


Chart 2: The US Dollar index has landed bang on the 50% Fibonacci support at 88.25


We have to look at the monthly chart (see Chart 2) to discover the reason why the market has stabilised at this stage. Te index has landed bang on the 50% Fibonacci support at 88.25 which just happens to be the exact low of the decline set in February. Note how the red 200 month moving average


intersects at exactly the


same price, offering an extra level of support. However, without a bullish pattern or indication that the market is likely to turn, the best bulls can hope


consolidation, buying them time to try to regroup.


for at this stage is further


If you look at the daily chart (Chart 3) again, you can see the one year downward sloping trend line providing resistance below 91.00, so bulls will need a sustained break above this level if they are to start to take control. A buy signal will be confirmed with the move above the blue 100 day moving average, which is also sloping downward, but hovering around 40 points above the trend line.


Let’s examine some of the dollar pairs to see if there is further evidence of weakness in the US dollar.


EUR/USD


With the euro making up the largest percentage of the dollar index, it is not surprising to see the EURUSD chart looking like a mirror image of the index. Te daily chart (see Chart 4) shows how the EURUSD pair was held by the 15-month trend line dating back to the peak in November


Chart 3: US Dollar Index - daily chart 18 FX TRADER MAGAZINE April - June 2018


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