Investors expect the Fed rate hike
TThe result of the former FBI director James Comey’s testimony was the preliminary opinion of American lawyers that the US President Donald Trump had not violated the legislation during his dismissal. This reduced the probability of Trump’s impeachment and had a positive impact on the US dollar. Will the US dollar index continue to grow?
On the daily timeframe, USDIDX: D1 is trying to leave the downtrend to move upwards. The further price growth is possible in case of the Fed rate cut and an increase in political risks in Europe and other countries.
- The Parabolic indicator gives a bullish signal.
- The Bollinger bands have widened, which indicates high volatility. They are titled upward.
- The RSI Indicator is near 50. It has formed a positive divergence.
- The MACD Indicator gives a bullish signal.
The bullish momentum may develop in case USDIDX exceeds the last fractal high at 97.77. This level may serve as an entry point. The initial stop-loss may be placed below the last fractal low and the Parabolic signal at 96.46. After opening the pending order, we shall move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop level 96.46 without reaching the order at 97.77, we recommend cancelling the position: the market sustains internal changes that were not taken into account.
Summary of technical analysis:
| Position | Buy |
| Buy stop | Above 97,77 |
| Stop loss | Below 96,46 |