Today, on March 26, the Chair of the Federal Reserve Bank of Saint Louis made a speech at the investment conference in Hong Kong . He stated that the US economy is recovering faster while the rate of US unemployment is declining, thereby backing the growth, and allowing the Fed to consider further tapering of the QE program.
It seems like the Fed keeps supporting the US Dollar. Well, there are decent chances that the American currency may strengthen versus other majors in mid-term perspective.
After a decent decline seen on March 24th, the US Dollar managed to recover a bit of its losses yesterday. During today's European trading session, the USD Dollar index traded within the scope of the 79.86- 80.37 price range.
As usual, Market Leader asked Masterforex-V Academy to define the near-term prospects of the American currency versus other major.
In particular, the experts report that the USD index is currently consolidating within the mentioned range while waiting for several major economic reports form the USA. The list includes durable goods. This is going to be the major economic report of the day. The tendency has been positive so far. This may help the American currency to strengthen against a basket of 6 other major currencies.
This indicator is fundamental if to consider that the US economy is 70% based on consumption. If the figures are positive and better-tan-expected, we may well count on at least a short-term rally. Higher consumption of durable goods coupled with higher household income may well indicate that the economic situation in the USA is improving.
At the same time, Masterforex-V Academy analyzed the H1 chart of the USD index to define the technicals and outline the near-term scenarios of the index.
In particular, the timeframe indicates that a big-scale bullish momentum is completed. The price encountered resistance at 80,42 and rebounded form it to retrace by 50%. After than, the price made a local low at 79.85. At the moment of analyzing the chart, the price is fluctuating within the 79.85-80.40 range.
At this point, the USD index is developing a long-term downtrend, the experts report.
Resistance: 80.42 – an MF pivot and the top of the range. A break and consolidation above it will give way to 80.50.
Support: 80.06 – an MF pivot and the bottom of the range + 79.85 – the current local low.
In short, in order ot resume the rally, the price will have to consolidate above the mentioned levels of resistance.
Alternatively, the local low should be broken below the local low.
