The Dollar Index may post further gains after a “bullish breakout” above a resistance level this week, Royal Bank of Canada said, citing trading patterns.
The index, which IntercontinentalExchange Inc. (ICE) uses to track the greenback against the currencies of six U.S. trading partners, surpassed “congestive” resistance at 83.01 on Aug. 1, according to George Davis, chief technical analyst for fixed- income and currency strategy in Toronto at the bank’s RBC Dominion Securities unit. The gauge climbed to a one-week high yesterday, data compiled by Bloomberg show.
The advance is “underpinning topside momentum for the Dollar Index,” Davis wrote in a report yesterday. “We note that 83.63 serves as the next resistance target to watch for this development.” Resistance is an area on a chart where orders to sell may be clustered.
The gauge was little changed from yesterday at 83.33 as of 9:55 a.m. in Tokyo. It yesterday touched 83.51, the strongest since July 26. The Dollar Index is set for a 0.8 percent advance this week, the most since the period ended July 6.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.
Source: Bloomberg