The USD in Breakout Mode: Next Level
Rowan Crosby • 1 min read
The USD continues its form that started on Friday last week and has made fresh new highs in trade yesterday.
There have been a number of drivers that are pushing the USD up. And at the moment it appears the fundamentals and technicals are nicely aligned.
Fundamentally, the Greenback is on the rise in line with an improving economy. We should see two further rate hikes this year and that will continue to keep the USD on a path higher.
Meanwhile, there have been some concerns around the emerging markets as the Turkish economy has found trouble. In times of crisis, the USD acts as a safe-haven currency and this attracts buyers.
Technically speaking we had been looking at an ascending triangle which has now broken out. We’ve made fresh highs and levels are holding.
The USD is Strong
The resistance level at 96.50 is now support and it is the one to watch in trade on Wednesday.
The next major level that we are going to look to test is probably 97.50. Which is an area that we touched around 12 months ago.
We spiked through that point and it wasn’t a clean high as such so we will have to see what the price action is like.
In fact, the 97.50 level was a pullback area in a down-trending market. So let’s see how this plays out. Nevertheless, our bias remains bullish.