FX.co ★ The dollar index. And what does EUR USD have to do with it?

EURUSD scale H4

We see uncertainty about the movement of the euro. It is possible to break up from the range and trend up.

But it is also possible to fall below 1.1230 and move down.

Is it possible to say something about the potential?

At the moment, the situation is determined by the prospects of the dollar:

USDX - dollar index, daily chart.

Here we see a clear upward trend. Yes, there is a stop - and even under certain conditions (the foundation), a deep correction is possible.

Thus, we should look at the movement of the dollar index - if we receive a signal for the euro to exit the range. The logic is this: if we see the beginning of a correction for the dollar (the dollar index is falling strongly and going down out of the range), there is a prospect of a trend for the euro upward.

If the euro gives a signal to go up - but the dollar index remains in the range or even grows - most likely, the upward movement in the euro is either false - or does not have much potential.

If the euro goes down out of the range - and the dollar goes up out of the range - this is a strong trend signal - for the euro to go down.