Analysis of the past week

The last full week of February was remembered by the strengthening of the US currency across the whole spectrum of the market on the expectation of higher rates in the US. The strengthening was caused by the optimistic statistics for the US and the publication of the latest FOMC protocol, which spoke of a three-fold increase in rates in the US this year. Judging by the very optimistic tone of the protocol, the possibility of a four-fold increase was not discarded either.

But, despite optimistic forecasts and data, the US dollar index failed to reverse the overall downward trend. As a result, the American by the end of the week lost his fuse and moved to flat, questioning the development of the figure “double bottom“. At the same time, the main resistance levels of 90.20 and 90.50 were stable.

In conditions of slowing down the general downtrend on the American and its transition to flat it is necessary to expect the formation of a lateral triangle, which in the end will open the way to the support levels of 89.50 and 89.00. But this is in case if the American forms a reversal from the resistance levels.

Graph of the US dollar index. The current price is 89.70.

Hanzenko Anton