US Dollar at Key Resistance Heading into the Weekend

Forex.com Team Forex.com

Today’s price action in the US Dollar (DXY) gave the markets reason for a pause in its ascent back towards the recent highs near 99.00, closing below key resistance near 98.20. On a daily candlestick chart, today’s bar was a perfect shooting star! This one candle formation is generally a reversal signal in which bulls come in early and push the market higher. However later in the day, sellers take control and push the price lower to close near the opening price.

Source: Tradingview, FOREX.COM

Think about the psychology here for a minute:

Buyers pushed the price above 98.27 resistance (blue line), which takes out the stops of anyone who placed them just above that resistance level, causing more buying to occur. Once weak shorts have been stopped out, sellers come back in and push the price lower. This triggers stops of any weak longs who entered the market above the 98.27 resistance level, causing those buyers to get stopped out and therefore pushing price lower. The next day, selling typically continues and price closes lower on the day.

Therefore, if price continues lower in the US Dollar on Monday, US Dollar bears may look to buy Euros and GBP vs the USD, as these two currencies make up a majority of the DXY Index.

Author

Forex.com Team

Forex.com

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.