USD starts the New Year on the front foot
What an interesting start of the New Year! Currency market opened 2019 with a strong devaluation of the USD. That lasted through the Asian session and was stopped when Europeans opened their trading platforms. The opening in Frankfurt and London brought us a strong reversal and significant strength of the American currency.
First, the Dollar Index. Instrument broke the support on the 96.2 (green), which gave us a sell signal. That signal was fake as the price reversed creating a false reversal pattern. Current sentiment after this formation is strongly positive.
Second instrument here is the EURUSD, which tried to break the long-term down trendline. Buyers failed to hold above this line. In addition to that, sellers used the horizontal resistance on the 1.148. As long as we are below that line, the sell signal is ON.
The last instrument is the NZDUSD, where we do have a beautiful technical drop caused by the head and shoulders pattern bouncing from the 50% Fibonacci. Today, we are breaking the dynamic support of the bullish correction. That is a confirmation of the sell signal.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis