Top Forex Setups & Economic Events, Jan 14 – Dollar Index on a Bearish Run
Arslan Butt • 2 min read
- The dollar jumped against the Euro on Friday in choppy trading, supported by technical indicators after the single currency hit key resistance levels.
- Greenback’s outlook remains flat amid cautious signals from the Federal Reserve about further rate hikes.
- The Parliament Brexit Vote is keeping the Great Britain Pound in highlights this week.
- Japanese banks remained closed in observance of Coming-of-Age Day due to which we experienced thin volatility in the market.
Besides that, the economic calendar isn’t likely to release any high impact event today. Most of the traders’ focus will remain on the technical side of the market.
Economic Events to Watch Today
EUR – German WPI m/m
At 7:00 (GMT), Destatis is due to release the Wholesale Price Index for Germany. It shows a change in the price of goods sold by wholesalers. The economists are expecting a slight rise from 0.2% to 0.3% today.
For all the newbies, it’s a leading indicator of consumer inflation – when wholesalers charge more for goods and services, the higher costs are usually passed on to the consumer. Historically, this particular data don’t drive major moves in the market.
EUR – Industrial Production m/m
A fall in car manufacturing caused UK industrial production to sink during the three months till the end of November. This drop is echoing instability across Europe and proposing that any pre-Brexit stockpiling was failing to support the sector. Lately, the UK’s Industrial production has been 0.8% lower during the three months to November.
Unlike that, the European industrial production rose to 0.2% in November and economists are expecting it to rise to 0.3%.
NZD – NZIER Business Confidence
It’s a survey of about 2.5K businesses which asks respondents to rate the relative 6-month economic outlook. Lately, New Zealand’s business confidence has lost momentum and it’s going down, from 5 in October 2018 to -30 in December 2018. Let’s see how the market plays the figure today.
Dollar Index (DXY) – Technical Outlook
Looking at the daily chart below, the dollar index closed sort of like a hanging man candlestick for November, and the very next candle is bearish engulfing closing with full bearish power at $96.02.
The leading indicators such as RSI and Stochastic have entered the overbought region.
The dollar index has completed 61.8% retracement below $98 on the monthly timeframe, which signifies that the bulls may be exhausted and sellers are looming around the corner. The dollar index (DXY) is likely to continue trading bearish until $94.50 and the violation of this may lead it towards $92.
Good luck and keep following FX Leaders for another profitable week.