It’s been quite a while since I’ve reviewed the dollar index, so I think it’s about time that I revisit it again. On the USDX 4-hour chart, you can see that the trend seems to be slightly up, as price has been clearly making “higher lows.” With price finding significant support at the major rising trend line and the Stochastic hitting the oversold territory, we could see the dollar index rally soon.
Well, well, well, what do we have here? It appears that a double doji formation has formed right at a major resistance level! I don’t know about you, but this seems to indicate that the bears are starting to fight back, especially with the Stochastic showing that conditions are overbought. If you’re thinking of shorting the pair, then now is a good time to consider jumping in.
If you’re a EUR/GBP bull, you should be very careful in the next few days. Price action might have been trending higher in the past few days, but technical analysis seems to suggest that a trend change might come very soon. The .8600 level, which is a previous major support level, is fast approaching. It could serve as a key resistance level as it nicely coincides with the 50% Fibonacci retracement level.
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.
Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.