Dollar Index May Decline to One-Month Low on Fibonacci: Technical Analysis
The Dollar Index (DXY) is set to break support lines and may fall to a one-month low, Gaitame.com Research Institute Ltd. said, citing trading patterns.
IntercontinentalExchange Inc.’s index, which tracks the greenback versus those of six major U.S. trading partners, closed yesterday 0.4 percent higher than its 20-day average of 78.295 and has been above Nov. 30’s intraday low of 77.923.
The Dollar Index may then fall to 77.213, which is the 50 percent retracement level from a Nov. 25 high to an Oct. 27 low, Kawabata said, citing the daily Fibonacci chart. If the index slides below that, it’s likely to decline to the 61.8 percent retracement level of 76.626, he said, the lowest since Nov. 9.
The Dollar Index lost 0.1 percent to 78.605 yesterday.
Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. A break above resistance, or below support, indicates it may move to the next level. Support refers to an area where buy orders may cluster. Resistance is where there may be orders to sell.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.
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