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Technical analysis, get ready for the big bounce on the dollar

EURUSD Tech analysis by Simon Kazinsky on 20:33 July 21, 2020 EST

Contrary to the predominant view among forex analysts the dollar is ready to bounce any minute now.

The sentiment is quite adverse against the US dollar at present as monetary expansion keeps underway. However, this is true not only for the buck but for every single major currency out there. Central banks keep printing hand over fist. Hence, this is just a race to the bottom in which all fiat money are participating and, by no means, no other currency aside from the Swiss franc and perhaps the japanese yen, which has been weak lately, can claim to be a safe haven to the extent the US currency is.

Moreover, Gold is almost at its record highs in dollar terms so, in the XAUUSD chart, it would make sense for a correction around curent levels which, if it materializes, would mean serious strength for the dollar.

In technical terms we can see in the chart above that, at present, the dollar is in an UPTREND against a basket of currencies and the current roll back can be considered temporary. The 70 months moving average has given support twice before and now it is being tested. If the dollar appears to bounce at this point it will be a very bullish signal.

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