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The Dollar Index is approaching a level that may signal an end to the declining trend for the U.S. currency, Commerzbank AG said, citing trading patterns.
IntercontinentalExchange’s Dollar Index, which tracks the greenback against the currencies of six major trading partners including the euro, could signal a bullish trend should it break above a so-called channel resistance level of 77.01, according to the bank. The index rose 1.30 percent from a week ago to 75.71 as of 9:30 a.m. in London today.
“The 77.01 is a key level to watch, as a rise above that may signal that the bearish trend is over,” said Axel Rudolph, a senior technical analyst at Commerzbank. “If the level is overcome, the next to watch would be 78.33, which represents a 200-day moving average.”
A moving average is an indicator that displays the average value of a security’s price over a period of time. A close above the level suggests the asset may be on the rise.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. A resistance level on a chart is where technical analysts expect orders to sell a currency and its related securities. Support is where buy orders may be clustered.
To contact the reporter on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles in London at dtilles@bloomberg.net
