Let’s start with the most popular one – DXY, so Index od the American Dollar. Most recently, USD found a very strong resistance – mid-term down trendline and the 38,2% Fibonacci. Only the fact, that the price met the resistance is not enough to be bearish – you need some sort of a rejection or a bounce from those high levels. To be honest with You, this is exactly what we got thanks to two daily shooting star candles. As long as we stay below the green line, the sentiment is negative.
Next instrument is the EURX, so the index of the Common Currency – Euro. Here we do have a very handsome technical pattern, promoting a bullish reversal. This formation is an inverse head and shoulders. It is already up and running as overnight, we broke the neckline, which in theory brings us a buy signal. The closest target is on the highs from December.
Now, a bit forgotten Sterling with the GBP Index. Forgotten as Brexit is no longer a hot topic in the media. Here, we do have two bearish signals but we are still waiting for the main one, which would give us a great trading occasion. First of all, we broke the lower line of the triangle. What is more, we broke the up trendline. The one think that is missing is the breakout of the major horizontal support. Once that will happen, we will have a legitimate occasion to go short.
This article is written by Tomasz Wisniewski, Director of Research and Education at Axiory
This article was originally posted on FX Empire
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