Statistics from the US Will Determine the Fate of the Dollar in the Short Term

The last session of trading on major currency pairs are very active. At the same time, a unidirectional trend is not observed. The dollar index (#DX) is in a sideways trend with a fairly wide range of 94.00-94.50. Investors continue to assess the risks of a trade war. The US President announced the introduction of a new 10% duty on imports of Chinese goods worth $200 billion. Donald Trump also said that tariffs could rise to 25% if China took retaliatory measures. At the moment, financial market participants expect additional drivers.

USD sep 2018
Source: finviz.com

This week a number of important economic reports from the US, which will influence the alignment of forces on major currency majors in the short term, will be published. This statistics can also affect the Fed's views on monetary policy. According to recent statements by the FOMC representatives, the regulator plans to adhere to further tightening of monetary policy.

On Thursday, September 20, the index of production activity from the Federal Reserve Bank of Philadelphia will be published at 15:30 (GMT+3:00). This index determines the economic well-being of the manufacturing sector of the Federal District of Philadelphia. Experts expect that in September the index will accelerate from 11.9 to 17.0. Investors will also assess the statistics of home sales on the existing market in the US at 17:00 (GMT+3:00). We recommend you to take into account the difference between the actual and the forecasted values.

US Philadelphis FED Manufacturing Index Oct 2018
Source: tradingeconomics.com
Let`s consider the current technical pattern on the EUR/USD currency pair
  • Support levels: 1.16250, 1.15400, 1.14350
  • Resistance levels: 1.17200, 1.17850, 1.18500
EUR/USD pattern

At the moment, the EUR/USD currency pair is in a sideways trend. The technical pattern is ambiguous. EUR/USD is testing the key support and resistance levels: 1.16250 and 1.17200, respectively. Indicators point to the power of buyers:
- the price has fixed above 50 MA and 200 MA;
- the MACD histogram is located in the positive zone.

Nevertheless, we recommend you to open positions from the key levels.

If the price fixes above the resistance level of 1.17200, further growth of the EUR/USD currency pair is expected. The movement is tending to the key offer zone of 1.17850-1.18000.

Alternative option. If the EUR/USD quotes fix below 1.16250, it is necessary to look for entry points to open short positions. The closest target for profit taking is the support level of 1.15400.

When following the positions, we recommend using a trailing stop.

by JustForex, 2018.09.19

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