Dollar technical analysis ahead Trump’s first press conference

Donald Trump’s first post-election press conference is taking place today. We look at the Dollar technical analysis and how it’s expected to move as a result of this event.

11 January, AtoZForex – The US President-elect Donald Trump will give his first press conference today. He will speak on a broad range of subjects that will directly have quick impact on the Dollar. This is expected to also affect USD-quoted currency pairs. The Dollar bullish strength has been dropping marginally since the beginning of the year. Investors and traders await what the new policies will be under Mr Trump.

The marginal drop looks corrective technically, typical of a movement that needs a fundamental event like this to decide where next to go. We will check the most likely behavior expected of the Dollar during and after this event.

Dollar technical analysis: bullish continuation?

The chart below shows the dollar index in a corrective wave 4.

dollar technical analysis Hourly Dollar index Elliott wave analysis (click to zoom)

Price peaked at 1263 slightly above December 2016 high (1262). There was a 3-swing correction down-wave 4, to 1245. Price rallied last week showing some signs of bullish resurgence but was resisted at 1256. Dollar stays stable  this week as traders and investors are cautious of Trump’s press conference today. If the event today is bullish for the Dollar, we should expect price to break above 1256 with an impulse wave as shown in the chart above. This move will take price above 1260 to 1270.

Dollar technical analysis: deeper bearish correction?

The recent correction is shallow. More often than not, wave 4 of a degree retraces to the 4th sub-wave of the wave 3 of the same degree- according to the Elliott wave theory.

dollar technical analysis Hourly Dollar index Elliott wave analysis (click to zoom)

Wave iv of 3 is around 123x and price may dip further if the conference today is perceived bearish for the Dollar. A double zigzag pattern is emerging with the first leg completed. Further 3-wave swings can be seen downside to 123x before any chance for bullish trend continuation.

Conclusion: As it stands, price stays between 1245 and 1256. The event is expected to break one of this to determine the next near term direction of the Dollar. A break below 1245 will see price dip further to 123x or even 122x. A break above 1256 will see the bullish trend continue above 1260 to 1270.

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