By Dan Eduard
Over the last week, the US dollar has moved up more than 2000 pips against its Danish counterpart, largely due to positive fundamental data that has caused investors to flock to the greenback. At the same time, technical data is now showing that the pair’s bullish run may be coming to an end.
We will be looking at the daily chart for USD/DKK, provided by ForexYard. The technical indicators being examined are the Bollinger Bands, Relative Strength Index (RSI), Stochastic Slow and Williams Percent Range.
1. We can see that the last several price ticks are right along the upper Bollinger Band. This is typically a sign that a downward trend is likely to occur in the near future.
2. While the Relative Strength Index is not currently in overbought territory, it is pointing upward and seems poised to breach the upper resistance line. When it does, a bearish correction is likely to occur.
3. The Stochastic Slow has formed a bearish cross and is already pointing downward. Traders can take this as a clear sign that downward pressure exists for this pair.
4. The Williams Percent Range is currently right around the -10 level. Typically when this indicator is above -20, it is a sign that the pair is overbought and likely to correct itself.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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