The last trading session this year brings a continuation of the US Dollar weakness observed in recent days. The good data from the US economy in form of Chicago PMI index published yesterday, which reached its 7-year peaks, did not stop the US Dollar bears The market is pessimistic towards the US currency, as it has not yet seen any chances for positive changes in expectations related to the FED monetary policy. Additionally, from a historical perspective, the first quarter was more often weaker for the US Dollar, which was explained by the weakness of macroeconomic data due to weather conditions (severe winter).
Trading in the period between Christmas is, however, characterized by the continuation of the observed dominant trends, so the US Dollar should continue to weaken across the board. The seasonals factors might play an important role in January and trigger highly anticipated January effect.
Let’s now take a look at the US Dollar Index technical picture at the H4 time frame. The price has broken below the important technical support at the level of 92.49 and currently is heading towards the next important support at 91.50.The market conditions are now oversold, but there is still no bullish divergence between the price and momentum present yet. The zone between the levels of 92.49 – 92.67 will now act as a resistance to the price as long as the lower lows will be made.
The material has been provided by InstaForex Company – www.instaforex.com
Source:: Global macro overview for 29/12/2017