USDOLLAR Runs into Resistance; Oscillators due to Normalise

2020年2月24日

Here we see the daily chart of FXCM's USDOLLAR index. We note that the green 5-day EMA is above the orange 10-day EMA with good angle and separation. This is indicative of the strong upwards momentum of the greenback. However, technically, the index has run into overhead resistance (red shaded horizontal) at a time when the RSI is overbought (in excess of 80). Furthermore, we can see that the EMAs crossed in early January at about the time the RSI pushed above 50 (aqua ellipses). Thus,the current impulse move is mature and certainly may be close to a correction. If a pullback does chart, it may very well be a buying opportunity. The greenback is a beneficiary of the renewed fears surrounding the spread of the coronvirus, particularity to areas outside of China (we have seen a jump in cases in South Korea and Italy). I.e. the USDOLLAR is currently being utilised as a safe haven and this is likely to continue given the poor choice of alternatives (the JPY seems to have been stripped of this status, at least temporarily. following its 1.6% GDP contraction last week).