The USD is expected to keep trading between 7.1600 and 7.1750. Recent changes show it’s part of a range trading phase between wider levels of 7.1550 and 7.1850. In the last 24 hours, the USD was predicted to drop slightly but instead rose sharply to 7.1740 after falling to 7.1570. This indicates that the upward movement of the USD may be slowing down.

Short Term USD Expectations

Looking ahead one to three weeks, we expect the USD to decline. Even though the currency spiked recently, the strong resistance level at 7.1790 has not been broken. This suggests that momentum for a downward trend may be easing within the trading range. Please note that this information includes predictions with risks and should not be considered direct investment advice. It’s crucial to do thorough research before investing. Investing carries risks, including the possibility of losing your entire investment. The authors are not responsible for any inaccuracies or omissions. Based on what we’ve seen, it’s clear the recent rise in the dollar, while sudden, still fits within a known pattern. The jump to 7.1740 after a dip lacked enough strength to break past the upper resistance. This indicates that the upward movement may be stalling. We’ve witnessed similar quick bursts of strength before; they often remain confined within limits, especially as ranges tighten and investors show less conviction.

Longer Term Currency Outlook

In the slightly longer term, the overall situation hasn’t changed much. Although the US dollar had a brief surge, it hasn’t convincingly broken through the known resistance level. The 7.1790 mark is not just a random number; it acts as a ceiling. The recent failure to exceed this level suggests that the prior downward trend may be slowing but hasn’t completely reversed. What we’re seeing is a buildup, where compressed volatility often points toward a potential shift. For those employing derivative strategies, the current market offers chances within defined limits. While breakout conditions haven’t appeared, the existing channel structure remains. Strategies benefiting from limited moves—such as straddles with tight deltas or short strangles—could continue to succeed, provided risks are managed with clear exit points. Right now, it’s not a market for aggressive directional bets. Short-term traders should look for signs of fatigue near the top of the range. If the dollar continues to struggle near this upper limit, especially with declining volume or momentum, it may be better to bet against those rallies rather than chasing momentum that isn’t sustainable. We need to avoid overreacting to a single session’s strength, especially if it doesn’t break longer-term trends. Overtrading based on isolated strength is a common mistake. Considering volatility, current conditions suggest that pricing in possible adjustments is still an option. If you compare implied volatility with actual results and they keep diverging, it may indicate the premium is overpriced, which could lead to a chance of selling gamma once again. So, even if it’s tempting to make directional bets after a sharp move, remember that movement isn’t significant unless it breaks new boundaries. Create your live VT Markets account and start trading now.

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