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James Hyerczyk

The U.S. Dollar is consolidating against a basket of major currencies after a week of sharp declines that pushed it to its lowest level in two and a half years. Sellers were mostly influenced throughout the week by optimism driven by the rollout of vaccinations to fight the coronavirus outbreak and hopes for a new government stimulus bill.

At 18:23 GMT, March U.S. Dollar Index futures are trading 89.965, up 0.224 or +0.25%.

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The dollar also plunged after the Federal Reserve pledged to keep interest rates low until the economy shows signs of a sustainable recovery.

The greenback was also being aided on Friday by a slight dip in demand for riskier assets as stocks slipped from record highs as lawmakers rushed to bridge differences on additional coronavirus stimulus measures.

Daily March U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 89.640 will signal a resumption of the downtrend. The nearest main top is 92.730.

The minor trend is also down. A trade through 91.150 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is 91.150 to 89.640. Its 50% level at 90.395 is the primary upside target and resistance level.

The short-term range is 92.730 to 89.640. Its retracement zone at 91.185 to 91.550 is resistance.

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Daily Swing Chart Technical Forecast

The inside move suggests investor indecision and impending volatility.

If buyers take control of the price action then look for a move through yesterday’s high at 90.180. If this creates enough upside momentum then look for the move to possibly extend into the minor pivot at 90.395.

If sellers return then look for a move through 89.640. If this creates enough downside momentum then look for the selling to possibly extend into the April 17, 2018 main bottom at 89.230.

For a look at all of today’s economic events, check out our economic calendar.

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