US Dollar Index At Critical Point – Forex Daily Analysis
Our EURUSD analysis was spot on yesterday. Pair dropped and came close to 1 pip from our cited target before rallying up +150 pips after FOMC announcement. $600 Billion worth of government debt will purchased through June next year, this is more likely to drop USD further. Some market analyst say this amount was already “priced in” by the market and there will not be much drop in USD. From what I see US Dollar Index is at a critical point where it could start a whole new leg of USD decline.
Chart below shows how US Dollar index is currently testing support at 76.20-30. A break below 76.00 will drive this pair all the way to 74.00.
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4 hour chart below shows how price retested the trendline after the breakout and currently looking to head higher.
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Chart below is interesting. The next point where price can find resistance is at 1.4300, it is also where weekly upper trendline comes into play.
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As we know there are more important news to come this week. Bank of England may open doors to more QE to lift the the U.K. economy while the European Central Bank is expected to hold and play safe. The Bank of Japan is then going to release statement revealing whether they will follow suit. Not to forget friday’s Nonfarm Payrolls which will provide further clue and a worse than expected number will surely put further pressure on USD.
Live Trading Room was uneventful yesterday, we didn’t take any trades.
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