US DOLLAR WEEKLY TECHNICAL FORECAST – BULLISH
The US Greenback edged barely larger this previous week with the DXY Index eking out a modest 0.2% acquire. US Greenback weak point appeared to wane broadly alongside surging Treasury yields. EUR/USD failed to take care of altitude after printing an in depth above the 1.2300-price degree and GBP/USD has been consolidating decrease. This brings to focus US Greenback rebound potential off two-year lows.
DXY – US DOLLAR INDEX PRICE CHART: WEEKLY TIME FRAME (NOV 2019 TO JAN 2021)
Chart by @RichDvorakFX created utilizing TradingView
US Greenback bears pushed the DXY Index to its weakest degree since March 2018 headed into the Georgia senate runoff election, however as soon as the 10-year Treasury yield eclipsed the 1.00% degree on prospects of a democratic sweep, the Dollar whipsawed broadly larger and completed constructive on the week. Although it might be untimely to name a backside, the US Greenback does look fairly oversold and is perhaps primed for a aid bounce throughout the confines of its obvious falling wedge sample. Taking out final week’s low may undermine the US Greenback rebound try and expose the 88.20-price degree the place the DXY Index bottomed almost three years in the past.
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EUR/USD PRICE CHART: DAILY TIME FRAME (10 OCT 2020 TO 08 JAN 2021)
EUR/USD pullback potential is underscored by the main foreign money pair breaching its bullish trendline prolonged from the 03 November and 23 November swing lows. Detrimental divergence on the relative energy index additionally highlights waning upward momentum as EUR/USD value motion recoils decrease from the 1.2300-level. The 23.6% Fibonacci retracement degree outlined on the chart above stands out as a doable space of buoyancy earlier than a take a look at of the 50-day easy transferring common comes into consideration. Reclaiming the 20-day easy transferring common may reinvigorate EUR/USD bulls to have one other have a look at latest highs, nevertheless.
| Change in | Longs | Shorts | OI |
| Day by day | -16% | -4% | -9% |
| Weekly | 18% | 2% | 8% |
GBP/USD PRICE CHART: DAILY TIME FRAME (10 OCTG 2020 TO 08 JAN 2021)
GBP/USD has drifted and recorded a collection of decrease highs for the reason that begin of the yr. This cast a bearish MACD crossover on a each day chart. The contracting Bollinger Band width additional suggests the Pound-Greenback is perhaps in consolidation mode. Breaching the 20-day easy transferring common may inspire GBP/USD bears to make a deeper push towards the 1.3400-price degree. This potential technical assist zone is underpinned by a confluence of the 50-day easy transferring common, backside Bollinger Band, and 38.2% Fibonacci retracement of the rally off November’s swing low. Alternatively, if GBP/USD value motion surmounts its short-term bearish trendline, there might be a resumption of US Greenback weak point.
| Change in | Longs | Shorts | OI |
| Day by day | -13% | -1% | -7% |
| Weekly | 27% | -24% | -5% |
— Written by Wealthy Dvorak, Analyst for DailyFX.com
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