VOT Research Desk
Technical Examination
Instability in price pressures in August, which was hotter than anticipated, sparked a broad-based dollar rally. This suggests that the US central bank will continue its aggressive rate hike program at its policy meeting next week.
The statistics restored confidence in another 75 basis point raise at the Fed’s September meeting, which had been fading after larger bulls took a break.
The dollar market grew by almost 1.6% in the minutes following the announcement of the mostly unimpressive data, retracing nearly 61.8% of the decline from the new 20-year high (110.77) to 107.65 thus far and sending the first indication that the corrective phase may be nearing its end.
Daily Kijun-sen and 50% of the 104.49/110.77 up leg contained a four-day correction, and a bullish engulfing pattern is anticipated to appear on the daily chart to add to the good news.
After a brief dive into negative territory and RSI’s shift north from the neutrality zone, daily studies improved on the 14-d momentum’s turnaround.
A lift and close above the 10-day moving average (109.37) would reinforce the bullish structure for further recovery, while today’s close above 108.84 (broken Fibo 38.2% of 110.77/107.65) is considered as the absolute minimum condition to keep new bulls in play.
Res: 109.33; 109.58; 110.00; 110.22.
Sup: 108.84; 108.38; 107.78; 707.65.
