The American currency is still being supported by incoming information: the agreement between the Washington - Beijing is pushing away the possibility of trade wars, the chaos on the Italian political scene is not conducive to the euro mainly through the debt market issues. This is being conducted in two ways: by spreading the profitability of Italian and German papers and fueling the demand for the debt of the Federal Republic of Germany with the established trend of sell off US bonds. The political impasse is a permanent element of the Italian political scene and this factor has been inflated by the markets, but it is well proved by the pro-dollar sentiment, in which every pretext to sell other currencies will be used to the limits.
Such a picture of the market in recent days was also due to another factor: the change of speculative positioning. Extremely negative attitude to the dollar has been erased. Similarly: the largest optimism in the history of the euro prospects. In order to sustain the dollar rally and convince investors to build a long position in this currency, something more will be needed.In a similar situation less than a year ago was the euro: after the elections in France, short positions were reduced due to the evaporation of political risk, but for further appreciation, an ECB stimulus was needed (memorable Draghi June's speech in Sintra) and a strong recovery of the economic situation. The dollar probably can not count on a similar scenario, and certainly not in the coming days. Anyway, recent comments from FOMC members reveal a large dose of caution and there are also the first currency pairs, in which there is an attempt to reverse the weakness against the dollar, like AUD, EUR and NZD.
Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market continues to trade inside of the rising channel and the price had made another higher high at the level of 94.07 before a corrective pull-back towards the level of 93.42 occurred. The bulls are still in control of the market and the next target is seen at the level of 94.22. Only a sustained breakout below the level of 92.85 would change the bias from bullish to bearish.
