USD Index: More downside pressure to come

Mthokozisi Mpofu Knars Capital

The chart below shows the USD Index. In the last four weeks, we have been in a clear downtrend which ended with an ending diagonal. Since then we've had a clear impulse higher giving us confidence that the initial larger move lower is now complete.

We are looking for a correction higher to the yellow zone before the downtrend continues. We may, however, retrace back to the (a) high as an alternative possibility. The previous wave iv high is also an ideal area to start looking to add short positions in anticipation of the move lower.

Key news events to look out for this week:

Wednesday 5th of May
ADP Non-Farm Employment Change, ISM Services PMI, Crude Oil Inventories.
Thursday 6th of May
Unemployment Claims.
Friday 7th of May
Average Hourly Earnings, Non-Farm Employment Change, Unemployment Rate.

Res: 91.767; 92.125; 92.500
Supp: 90.616; 90.358; 90.043

Author

Mthokozisi Mpofu

Knars Capital

Mthokozisi Mpofu is the Managing Director of Knars Capital Pvt Ltd, an investment advisory firm helping African SMEs secure growth capital and become investor-ready.

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