Ready for another Drop on the USD?

Correction on the USD continues. It is still just a correction though. Not that it was unexpected as USD has serious troubles since the very beginning of the month so with such a heavy drop, chances for a correction were constantly increasing.

With the most recent rises, Dollar Index is testing the broken up trendline as a closest resistance. Test so far is positive for the sellers, as the price stays below that line. With the current momentum, the target remains on the orange area, slightly below 94.4

EURUSD also does not allow the USD to spread the wings. The main pair is above the neckline of the Inverse Head and Shoulders Pattern and above the horizontal support on the 1.133. As long as we stay above those two, the sentiment remains positive.

USDCHF managed to set new yearly lows and then bounced higher. For us, it is just a dead cat bounce and the price has no bigger chances for a major reversal…yet. USDCHF still stays below major dynamic and horizontal resistances so the outlook has to be pessimistic.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis