Greenback on the Brink?
The U.S. Dollar Index has drifted for more than a year, but now some traders may look for a move to the downside.
The first pattern on today’s chart (using 2-day candles) is the pair of converging lines since late 2023. DXY broke this pattern in early July, which may suggest it’s getting ready to move.
Second is the tight range between 104.8 and 104. The higher level was support in early July and resistance later in the month. The lower level was support in early June and is now giving way.
We next turn to the Euro-U.S. dollar pair, with a sequence of lower highs broken last month. It also made a higher low after retracing a little more than half the June 26-July 17 move. That may confirm a new uptrend is taking shape (which in turn would be negative for the greenback).
These technical patterns may be especially impactful given July’s weak economic data and the widening belief the Federal Reserve will cut interest rates next month.
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Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit [url =tradestation.com/DisclosureTSCompanies] TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
The first pattern on today’s chart (using 2-day candles) is the pair of converging lines since late 2023. DXY broke this pattern in early July, which may suggest it’s getting ready to move.
Second is the tight range between 104.8 and 104. The higher level was support in early July and resistance later in the month. The lower level was support in early June and is now giving way.
We next turn to the Euro-U.S. dollar pair, with a sequence of lower highs broken last month. It also made a higher low after retracing a little more than half the June 26-July 17 move. That may confirm a new uptrend is taking shape (which in turn would be negative for the greenback).
These technical patterns may be especially impactful given July’s weak economic data and the widening belief the Federal Reserve will cut interest rates next month.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit [url =tradestation.com/DisclosureTSCompanies] TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
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