[Video] USD Could Be Poised For A Corrective Bounce | DXY, GBP, EUR, CHF

A bullish outside day on the US dollar index above the March lows suggests a corrective bounce could be due. We take a technical look at potential setups on GBP/USD, EUR/USD and USD/CHF.

A bullish outside day on the US dollar index above the March lows suggests a corrective bounce could be due. Less dovish than expected comments from Fed members Powell and Bullard helped break the dollar’s bearish streak since last week’s FOMC meeting, proving reversal candles across FX majors. Whilst the G20 could still impact the greenback, the change of tone from the Fed has removed a headwind for the greenback.

  • GBP/USD is of particular interest, given its bearish engulfing candle which has formed beneath a resistance cluster.
  • EUR/USD remains above a pivotal level but, due to its rally looking overextended, the bias is for a break back within range (even if only temporary)
  • USD/CHF has also produced a 2-ar reversal near the (prior) 2019 lows. Whilst this too could see a bounce, we prefer setups on GBP/USD and EUR/USD, due to the strength of the bearish move on the Swissy which led to thee lows.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.