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Dollar Index Review Before the GDP Data Release

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This Thursday 27, the Bureau of Economic Analysis will release the U.S. Gross Domestic Product (GDP). The analysts’ consensus foresees 3.1% (QoQ). In this post, we’ll review what to expect from the US Dollar Index for the coming sessions.

The FED and the bearish connector

In the last FED’s interest rate decision, the broad rate was left unchanged the rate at 2.5%. This decision not only triggered a new bearish leg on the US Dollar Index but also created a connector of the bearish cycle. In the last Tuesday session, the Greenback rebounded once the price reached 100% of equal legs. Within this context, we expect a bullish movement which should allow us to jump into the new bearish cycle. The exhaustion zone for the bounce is between $95.81 and $97.31. Once the DXY reaches this area, we must evaluate the next path. If the price honour and follows the bearish bias, the mid-term bearish target is between the $95.33 and $94.69. The invalidation level is at $98.28.

 

Remember that the price is not compelled to move as our forecast proposes. The charts released corresponds to the Elliott Wave Theory application.

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