After gap down candle occurred at 98.79 level, the bears have managed to extend the price dips upto the current 98.86 levels (while articulating), yesterday’s rallies have exhausted exactly at 99.33 levels (refer ).
For now, any such upswings are not substantiated by both momentum and trend indicators on this timeframe. Instead, we could see DMA and crossovers on daily and weekly charts.
The US dollar index forms pattern at 99.84 levels, historically, the bulls test the support at the same levels and the same was occurred to the evidence the upswings, but these upswings were restrained exactly at 7DMAs (refer ).
For now, both leading & lagging oscillators signal momentum & downtrend continuation.
Both and curves evidence downward convergence with the prevailing slumps.
also signals to prolong further.
On a broader perspective, the current prices have slide below 7EMAs, the sentiments are backed up by both and curves.
Fundamentally, the US administration on the other hand has returned to its tax plans. Treasury Secretary Mnuchin promised last night that there will be far-reaching reforms before the end of the year. The FX market no longer pays much attention to these promises.
Neither had the government so far convinced in other key areas nor do we have sufficient knowledge as to which way the tax reform would go.
While the FxWirePro currency strength index for the dollar has been neutral earlier today in Asian session after a skepticism over Trump’s tax reforming plans, despite relinquishing its gain for the day for the previous week after gaining traction found in as stated above but the overall dollar basket is still weaker.
Well, as a result of above technical reasoning, on speculative grounds we advise tunnel spreads which are binary versions of debit put spreads.
This strategy is likely to fetch leveraged yields than spot FX and certain yields keeping upper strikes at 99.33 and lower strikes at 98.67 levels.