Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Chart Of The Day: Will The Dollar Rally Return?

By Investing.com (Pinchas Cohen/Investing.com)ForexJun 03, 2021 09:00AM ET
www.investing.com/analysis/chart-of-the-day-will-the-dollar-rally-return-200583992
Chart Of The Day: Will The Dollar Rally Return?
By Investing.com (Pinchas Cohen/Investing.com)   |  Jun 03, 2021 09:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

The dollar climbed for the second day after Philadelphia Fed President Patrick Harker said yesterday that his central bank should begin discussing the time frame for paring back its bond-buying program. Reducing this liquidity in the system would most likely result in a jump in the value of the dollar.

Dollar Index Daily
Dollar Index Daily

The dollar climbed above its downtrend line since the Mar. 31 high for the first time, yesterday. While the price closed above the line, it closed at nearly the same price as it opened. As of now, the dollar actually created a medium-sized green candle.

Supply and demand may be forming a small rounding bottom. If the price closes above 90 we would consider it complete.

We have been bearish on the dollar for many months, until it completed a falling wedge. We then gave a bullish call, until it completed a rising wedge, to which we gave a medium-term short call while maintaining our long-term bullish stance. If the price will complete this rounding bottom, we expect it to retest the top of the small rising wedge at 93.50.

The MACD’s short MA crossed above the long MA, after bottoming out—and this is important—demonstrating how the broad trend is turning.

The 50 DMA fell to the top of the 100 DMA, which could be a support.

Trading Strategies

Conservative traders should wait for the rounding bottom to complete, followed by a return move that retests the pattern’s integrity, before committing to a long position.

Moderate traders would wait for the same breakout and dip, for a better entry, if not for further confirmation.

Aggressive traders could enter a long position at will, provided they accepted the higher risk that corresponds to the higher return for entering before the rest of the market. A trading plan is imperative. Here’s an example:

Trade Sample

  • Entry: 90.00
  • Stop-Loss: 89.50
  • Risk: 50 pips
  • Target: 91.50
  • Reward: 150 pips
  • Risk-Reward Ratio: 1:3
Chart Of The Day: Will The Dollar Rally Return?
 

Related Articles

Scott Barkley
EUR/USD Breakout By Scott Barkley - Aug 05, 2021 1

BearishUSDX is bullish and uncommitted at the time of this post. EUR/USD hasa bear flag pattern (bearish) in play so should now see the resumption of the channel to the downside....

Chart Of The Day: Will The Dollar Rally Return?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Maleek bomber
Maleek bomber Jun 03, 2021 8:47AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I'm new and I don't understand how to trade
Pinchas Cohen
Pinchas Cohen Jun 03, 2021 8:47AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Don't trade, before you learn.
Alex rajan
alexrajan Jun 03, 2021 8:47AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
better not to trade ever in your life .its all about cheating
Felipe Daniel
Felipe Daniel Jun 03, 2021 8:04AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Will depend on non farm payrolls tomorrow Cohen
Pinchas Cohen
Pinchas Cohen Jun 03, 2021 8:04AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The non farm payrolls effects are short term, Daniel.
Solomon Lalani
Solomon Jun 03, 2021 7:25AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks for your contribution. Seems going long USDCAD from average 1.203 has a much better risk return than going long DX!
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email