Trader Advantage: Dollar Index Review - Feb 15 10 8:41 EST
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The Trader Advantage:
Dollar Index Review
Ahead of the U.S. Bank Holiday session, most pairs picked up where they left off last week with no major moves of note, and very little momentum. The preliminary gross domestic product for Japan increased slightly to 1.1%, and helped to push Usd/Jpy above the 20 and 100 day moving averages with near-term resistance at 90.40 and 90.65. The Rightmove house price index from the U.K. jumped 3.2% last month, and may start to impact the Bank of England interest rate outlook over time.
Last week, euro moved 20 pips, cable 100, aussie 200, cad 200, swissy 10, yen 60. The net gain was in the commodity based pairs Aud/Usd and Usd/Cad, and they may lead the move against the Usd if global risk markets (equities and commodities) find buyers. Both pairs have plenty of room to move on their weekly ranges, with both averaging 270 pips of movement over the last 21 weeks. The European and Interest rate based pairs will need a very good reason to show itself before they move too far.
Dollar Index
The 4 hour trend is long. The Usd has been bought in the move to the safety of Usd based Treasuries. Traders now have separation in regard to the differing percentage moves that are being made on each pair. Take care going long-Usd while the global risk markets re-connect the dots and tenuously buy the Usd in-line with the selling of stocks and commodities.
There is no strong signal that the market wants to be over 81.00 on the dollar index. The dollar index components are not all moving as one. Favor a straddle.
