After the New Year holidays the dollar stopped its decline. The dollar index demonstrates growth for the consecutive third day. After a three-week fall, it began to strengthen its position. In anticipation of the Fed's speakers, the reserve currency, along with the major indices, showed growth during the North American trading session yesterday.
Yesterday the falling yield of British government bonds helped the pound to restore its positions. However, at the moment the growth of the pound may be hampered by the political risks associated with a reshuffle in the cabinet-ministers. In addition, the UK's exit from the EU will have an impact on both the pound and the single currency.
Considering the technical outlook, we can observe the corrective movement of the pair. The RSI and Stochastic are directed down and point to the sale. At the moment our pair is at the resistance level of 1.3530 and is trying to overcome it. In the event of a breakout, we expect the pair to move further to Fibo 23.6, which is near the 1.3450 mark.
Our trading advice is to open short positions when we break through our resistance level and plan Take-profits near the Fibo level.
