Dollar Up and Out of Previous Daily Range on Fed Rate Hike, But Resistance is Just Overhead
February 19th, 2010WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
The USDX is moving higher on the Fed rate news, but be aware that a technical pullback is likely over the next week or two.
There are two resistance levels just overhead. The first is a pivot high from June 2009. The second is the 50% Fibonacci retracement level.
U.S. Dollar Index, Weekly Interval
Via: Wall Street Journal:
The dollar rose to a five-week high against the yen and to a fresh nine-month high against the euro early in Asia on Friday, after the U.S. Federal Reserve raised its discount rate in a fresh sign the Fed thinks financial markets are gradually returning to normal.
The Fed hiked the rate it charges banks for emergency loans by 25 basis points to 0.75%, fueling expectations for further rises in long-term interest rates, to the benefit of the U.S. unit, dealers said.
But with the Fed insisting the discount rate hike doesn’t represent a tightening of monetary policy or an upgrade of its view of the economy, it won’t likely prompt sharper dollar gains in the coming sessions, dealers said. A sustained dollar rally may only come if jobs and other data improve, laying the groundwork for a hike to the Fed’s key policy rate, traders said.
Fib it!
The dollar is going to continue to rise. I don’t have access to any continuous contracts for the USDX so can’t really comment.
It looks to me as it could be a pull back from which it’ll head back down for a while but who knows it could head on up to 85 – 86 area.
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