Dollar index bounced back nicely from lower levels after FOMC statement. FOMC stated that they will increase interest rate by the end of 2023. This statement gave negative impact on bullion and EUR whereas base metals too created panic after China’s statement to unload their base metal reserves.
Now, what to expect???
Still Dollar index looks positive but likely to hover in the range of 93—94 levels. Expect trend reversal on a weekly close above 94.00 levels only or else it could test its support level of 91.50—90.80 again.
Dollar index is forming a double bottom pattern on the weekly chart and it’s break out point is at 94.00. Three consecutive close + weekly close above 94.00 will take dollar index to 98–99 levels in days to come.
Dollar Index formed a major support zone at 88.00 levels which is unlikely to breach in terms unless and until any major news comes out from developed economies.
So buying near support will be the best trading strategy in $US against all major currency.
EURUSD- Trendy Head and Shoulder pattern formation on the weekly chart
A steep fall we have seen in EURUSD from the top and made a low of 1.1846 and settled around 1.1860.
EURUSD is forming head and shoulder pattern as clearly visible on the weekly chart and its break out level at 1.16.
Chances are bright that it could test 1.1750—1.1600 levels in days to come.
Three consecutive close + weekly close below 1.1600 will take EURUSD to 11.50 levels in days to come or else it could reverse from the support level of 1.1750—1.1600 again.
A dead cat bounce in EURUSD till 1.1980—1.2050 will be the best selling opportunity. Our view gets negates on a weekly close above 1.2350 levels only.
Trade safely as per levels given on the chart.