USDOLLAR Rallies In Longer-Term Downtrend
The above charts show FXCM’s USD index – the USDOLLAR . The left chart shows the daily time frame. It is evident that the current trend remains down, until proven otherwise.
1. Price is below the cloud.
2. The cloud remains light pink in colour.
3. Price is below the black base line.
4. The black base line is trending down.
5. The orange lagging span is comfortably below price.
The right chart shows the H1 of the USDOLLAR . The index has pulled back in the shorter term.
1. Price is approaching pink cloud resistance.
2. Price is above the black base line.
3. The black base line continues to move downwards.
4. The orange lagging span is at price.
The pullback is largely driven by fear creeping back into the market following comments by White House health advisor Dr Anthony Fauci noting that some US states are seeing a “disturbing surge” in coronavirus infections. Cases have increased by 5% or more in 26 states and hospitalisations are rising too.
To this end, we are closely watching the H1 for any bearishness, which will realign the short-term chart with the daily. If this does not happen, the prospect of economic disarray cannot be ignored as the possibility and impact of a second wave is considered by market participants.
Past performance is not an indicator of future results
CHART SOURCE: FXCM MARKETSCOPE 2.0