As we noted in our article this morning, we present our weekly macro calendar: it will be a relatively quiet week, and it will be worth paying attention to some US and EU data.
That’s why, after our technical analysis last week, it’s worth taking another look at the charts, taking a more comprehensive look at what they’re saying, and basically approaching the question in terms of the dollar’s expected path. In this area, the euro / dollar plays a major role, which is beyond the high so much that it has already exceeded the 200-week moving average, and the weekly RSI is also above 70, that is, the exchange rate is in the overbought range (the dollar’s decline is very severe ), which surrounds the horizontal resistance line. All this points to the fact that the dollar’s decline may stop, and possibly reverse. However, this morning EURUSD is moving sideways around 1.1220.
In the case of the dollar index, which shows the performance of the dollar against the six main external trading partners, we also see that there is only a small space from the point of view of technical analysis before a further drop for the dollar, as it extends the 61.8% Fibonacci retracement level at the level of 99, and the 2-period moving average 200 weeks is not far below it, while the weekly RSI is also moving towards the oversold range.
Precisely from the above all this points in a direction: near the very strong support zone of 329-330, at USDHUF, which is now located at 333, a stop and possibly a correction (dollar strengthening or, conversely, the fall of the forint may come). As we pointed out: the 200-week moving average is at 329, and above it there is a strong support level at 330, which is also the retest point for the upper leg of the trend channel. By the way, the forint this morning is moving sideways against the dollar between 333-333.5 compared to last Friday evening.
On the other hand, the fact that the forint’s exchange rate against the euro indicates little room for further strengthening of the forint at the moment also indicates that the USDCHF’s slide is coming to an end. As we pointed out: here we are really close to the 200-week moving average, and to a test of the multi-year uptrend line in the 369-370 range. By the way, this morning the forint is moving sideways against the euro between 374 and 374.5 compared to last Friday evening.
Cover image source: Getty Images
