USD's Bollinger bands are narrowing


The above is a daily chart of the USDOLLAR. We have added a standard Bollinger band to the chart. We note that the Bollingers are starting to narrow (green rectangle). Generally, markets, by their nature, cannot stay at “rest” for very long. Therefore, the narrowing of the bands is usually the proverbial calm before the storm i.e. it often precedes explosive moves. Unfortunately, the Bollinger don’t tell us the direction of these moves; only that they are due.

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at are those of the individual authors and do not necessarily represent the opinion of or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.