The US labor market data turned out to be positive
On Friday, positive data on the US labor market for July, 2017 were published in the US. Will the quotes of the US dollar index rise?
On the daily timeframe, USDIDX: D1 remains in the downtrend. However, its growth has slowed down and a number of technical analysis indicators have formed bullish signals. The further price increase is possible in case of the improvement of the US economic state and the growth in the probability of the Fed rate hike.
- The Parabolic indicator gives a bullish signal.
- The Bollinger bands have markedly widened, which means higher volatility.
- The RSI Indicator reached the oversold zone and started to grow. It has formed a positive divergence.
- The MACD Indicator still gives a bearish signal
The bearish momentum may develop in case USDIDX exceeds the resistance line of the downtrend at 93.6. This level may serve as an entry point. The initial stop loss may be placed below the last fractal low, the 15-month low and the Parabolic signal at 92.5. 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 at 92.5 without reaching the order at 93.6 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 93,6 |
| Stop loss | below 92,5 |