To show You the drop on the USD, we will use the DXY, so a Dollar Index. We already mentioned this instrument this week and we were obviously bearish. We pointed out at the shooting stars candles on the daily chart, which were bouncing from the major down trendline. Price could not resist such a big selling pressure and went down confirming the negative sentiment towards the American currency.
Weakness of the USD has implications all over the globe. For example on the price of commodities. Decline on the Dollar usually means rise on the Gold. On 14th of January, Gold drew a hammer candle on the daily chart. That additionally looks like a second bottom in the double bottom formation. Both structures are bullish and it seems that the price will continue to go up.
Long time – no see for the NZDUSD, which looks ready for another bullish wave. I think that Kiwi is still influenced by the big inverse head and shoulder formation from September. Recent drop was just a correction, which most probably ended yesterday with the price drawing a hammer on the daily chart. Today, kiwi is breaking the mid-term dynamic resistance and is showing a willingness to climb even higher. The sentiment seems positive.
This article is written by Tomasz Wisniewski, Director of Research and Education at Axiory
This article was originally posted on FX Empire
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