Healthy economic growth and rate hike expectations support US dollar. Will the USD continue advancing?
The US economic growth accelerated to 3.3% in the Q3 from 3.1% in the second quarter. And Senate passed its tax overhaul bill last Saturday. While Senate version of the tax bill differs from the legislation passed by the House of Representatives it is widely expected a final bill will be approved by both the House and Senate that President Donald Trump can sign it into law then. As investors anticipate the tax cut stimulus boost for the economy the Federal Reserve is meeting next week. A third interest rate hike this year is viewed as a virtual certainty. Strong economic growth and a rate hike expectation are bullish for the dollar index.
On the daily timeframe, the USDIDX: D1 has been rising after hitting a 10-week low in the end of November.
We expect the bullish momentum will continue after the price breaches above the upper Donchian bound at 93.643. A price above this level can be used as an entry point for a pending order to buy. The stop loss can be placed below the fractal low at 92.588. After placing the pending order, the stop loss is to be moved to the next fractal low, following Parabolic signals. By doing so, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (92.588) without reaching the order, we recommend canceling the position: the market sustains internal changes which were not taken into account.
Technical Analysis Summary
Position - Buy
Buy stop - Above 93.643
Stop loss - Below 92.588
Add a Comment
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.