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Top 3 charts of the week: USDIDX, Oil, W20


  • The US dollar index (USDIDX) tries to recoup some losses

  • Brent is painting a potential inverted head and shoulders formation

  • Polish blue chips keep trading beneath the resistance zone

The US currency had a tough time at the turn of the year. Dovish comments from Fed members, mixed US data and market expectations of a rate hike pause undermined sentiment towards the greenback. However, the downward pressures began to ease as of late and the US dollar index managed to rebound. The index has been trading within the upward channel since mid-2018 and the latest test of the lower limit of the channel met with strong reaction of bulls. Moreover, the lower limit is additionally strengthened by the 200-session moving average that runs in the same area. Data stream from the United States remains a key for the US currency and will be closely watched by investors’ from all around the world.

Source: xStation5

The situation on the oil market looks interesting as well. Crude prices moved significantly higher recently thanks to news of Saudi Arabia reducing its exports. It looks like the key member of the OPEC cartel will be going to the great lengths in order to restore balance on the oil market and lift prices. Another factor supporting bulls are rumours that the United States is not going to extend 6-month waivers granted to some major buyers of the Iranian oil. From the technical point of view, one can notice that price is painting potential inverted head and shoulders pattern. However, if this pattern is to be played out in textbook fashion, buyers must not allow price to fall beneath the 38.2% Fibo level in the $57-58 area. The neckline can be found in the vicinity of $62 handle.

Source: xStation5

Last but not the least, let us take a look at the Polish blue chips index, WIG20 (W20). The benchmark remained relatively stable amid the latest ups and downs on the global financial markets. The index has been trading within a range since mid-2018, what raises hopes that the downtrend started at the beginning of the previous year abated. Such an outcome puts Polish equities in a favourable position in case stocks all around the world are about to experience a recovery. WIG20 tested the resistance zone ranging above 2350 pts numerous times what raises prospects that bulls will finally manage to break above. Surpassing the resistance zone would pave the way towards the last year’s highs.

Source: xStation5

Daily summary: Markets in risk-on moods, Wall Street indices rally over 2%
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