Jump to content

USD Technical Analysis: Euro Parity Bounce Leading to Important First Test


Recommended Posts

Jul 19, 2022 | DailyFX
Paul Robinson, Strategist

USD TECHNICAL OUTLOOK

  • US Dollar Index (DXY) decline largely driven by Euro parity rebound
  • Levels and lines to watch in the days ahead

USD Technical Analysis: Euro Parity Bounce Leading to Important First Test

USD TECHNICAL ANALYSIS: EURO PARITY BOUNCE LEADING TO IMPORTANT FIRST TEST

The DXY index is coming off with good momentum from its recent peak on the back of a rally from just under parity in the Euro. Given that EUR accounts for about 57% of the DXY’s weighting the index will react in near inverse fashion.

The correction in the trend may be short-lived, but we may very well see a period of horizontal price action develop before the broader trends try to reassert themselves. What this move doesn’t look like at this time is a big-picture reversal. That would take a good bit more of time to get a handle on if it is.

The first levels to watch in the DXY and EUR/USD are 10581 and the 10340s, respectively. The DXY support level is a solid one with both the June high and a trend-line from May coming into confluence around the same price point.

The EUR/USD has the 2017 low at 10340, which is just a fraction lower than a pair of lows that developed in May and June. A short ways higher above those lows is a channel line dating to February. It’s a strong channel given its duration and connecting points, including the recent one just under parity.

The thinking is that we will see a bit more of the recent trends unfold, but soon support/resistance DXY/Euro will offer up some type of reaction points. How impactful those levels are will help determine whether a larger move can unfold or if the corrective move is over.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      21,179
    • Total Posts
      90,703
    • Total Members
      41,289
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Ethan
    Joined 29/01/23 18:45
  • Posts

    • Does anybody know the BIL (SPDR Bloomberg 1-3 Month T-Bill ETF) equivalent with a GBP currency hedge? I want the interest yield but I don't want the currency risk.
    • Capital, win loss ratio. If you have a trading edge and you can consistently win 50% of your trades, so your winning 5 trades out of 10. So if your risking 1% of your capital per trade, out of your 10 trades 5 would be losers, so that’s 5% loss and realistically out of the 5 winning trades, some would make small profits, some break even and 1, 2 or 3 could run nicely IF you can let your profits run, basically your making money out of 2 trades out of the 10 trades (80/20 Rule Pareto principle) So a $20,000 acct risking 1% is $200 per trade, this will keep the trader with his trade risk based on being able to win 50% of his trades. A long term trend trader can win with 30% wining trade. Basically you need to know your numbers. Rgds Pete
    • Investing in stocks can be a great way to grow your wealth over time. However, there are different approaches that investors can take when choosing which stocks to buy. Two of the most popular approaches are growth investing and value investing. Growth Investing Growth investing is an investment strategy that focuses on buying stocks of companies that are expected to grow at a faster rate than the overall market. These companies are often in industries that are growing quickly, such as technology or healthcare. Investors who use this approach believe that these companies will be able to generate higher profits in the future, which will lead to higher stock prices. One of the main advantages of growth investing is that it can potentially provide higher returns than the overall market. However, it is also riskier than other investment strategies, as these companies often have higher valuations and more volatile stock prices. Value Investing Value investing is an investment strategy that focuses on buying stocks of companies that are undervalued by the market. These companies may be in industries that are out of favour or have recently experienced challenges, but they have strong fundamentals and a history of profitability. Investors who use this approach believe that these companies are undervalued and that their true value will be recognized in the future, leading to higher stock prices. One of the main advantages of value investing is that it can potentially provide lower risk than growth investing. However, it may also provide lower returns in the long run, as these companies may not have the same growth potential as companies in the growth investing category. Comparing Growth and Value Investing Growth and value investing are two different approaches to stock investing, each with its own advantages and disadvantages. Growth investing can potentially provide higher returns but is riskier, while value investing can provide lower risk but potentially lower returns. An investor may choose one approach or a combination of both. A portfolio that contains a mix of growth and value stocks can provide a balance of potential returns and risk. Conclusion Both growth investing and value investing can be effective ways to invest in stocks. The key is to understand the potential risks and rewards of each approach and to choose the one that aligns with your investment goals and risk tolerance. Analyst Peter Mathers TradingLounge™ 
×
×
  • Create New...