While the rate is moving inside of the triangle trend-lines in the weekly chart, a descending channel towards the lower triangle trend-line has been formed in the daily chart. It is expected that the upper boundary of the channel will be broken at the lower triangle trend-line when the general trend will be taken over by the weekly pattern. Shorter time-frame patterns imply that the channel will not be broken just yet, which is in line with our expectations.
Weekly Chart:
© Dukascopy Bank SA
Uncertainty over short-term developments
Downward pressure on the currency is provided by the 55, 100 and 200-day SMAs, which will help the pair on its way through the channel to ultimately reach 8.1974. After a bounce from the aforementioned level, the pair will encounter intermediate resistance at the monthly pivot point at 9.3263 on its way back up. The rate could also break the channel immediately and carry on to the upper boundary of the triangle at 8.4731. Bollinger Bands have tightened up, caused by the contraction of volatility, which, in turn, has led the rate to touch the upper band repeatedly. This development implies the Dollar to be overbought against the Norwegian Krone and is supported by SWFX sentiment data, which shows 72 percent of traders expecting gains from an appreciating Dollar.
Hourly Chart:
© Dukascopy Bank SA
While Monday is a banking holiday in most of North America, data releases on fundamentals will bring some volatility in the Dollar market on Tuesday when ISM Non-Manufacturing PMI is revealed.
Aggregate Technical Indicators:
© Dukascopy Bank SA