The Dollar index is making higher highs and higher lows but the stochastic oscillator is not making higher highs. This is a sign of the bullish momentum weakening. This is a warning sign for bulls. Bulls need to be very cautious and raise their stops.
Blue lines - bullish channel Red lines - bearish divergence signs The Dollar index is still trading above the Ichimoku cloud and inside the bullish channel. Support is at 99.35-99.25. Stochastic oscillator on the 4-hour chart is giving bearish divergence signals. Resistance is at 100.25.
The Daily chart of the Dollar index remains bullish but we should expect a pullback soon as this upward move from 93.80 has extended too much and the daily stochastic has been overbought for too long. Support is at 99-98,75 on a daily basis and a target for the pullback is the 97.50 price level. The long-term trend remains bullish as price is above the Ichimoku cloud.
On H1 chart, USDX tried to consolidate again above the 100.00 price zone, but the Index is trying to correct the current rally towards the 200 SMA around the support level of 99.25. If USDX does a rebound above it, then we could see another rally above the 100.24 level in the short term. That moving average is slightly bullish, but MACD indicator is on the negative territory.
H1 chart's resistance levels: 99.80 / 100.24 H1 chart's support levels: 99.25 / 98.82 Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the USD Index breaks with a bullish candlestick; the resistance level is at 99.80, take profit is at 100.24, and stop loss is at 99.37.
The US dollar index is testing the short-term support level, and as I mentioned in previous posts, bulls should be very cautious as a correction towards 97.50 is very possible before the next leg up.
Blue lines - bullish channel Red lines - bearish divergence signs The US dollar index is testing the lower channel boundary at 99.70.99.60. A four-hour close below 99.50 will open the way to a deeper correction at least towards the Ichimoku cloud support at 99.20. However, the main target remains at 97.50.
The stochastic oscillator is overbought for far too long and a downward movement is hugely justified at current levels, so bulls should consider taking profits. This does not mean that a bullish trend is over. The bullish trend will be in danger only if the price breaks below 93.80.
The USDX is still following the bullish structure above the SMA 200, as the index will look to rally towards the resistance level of 100.24 in coming days. On the H1 chart, we should note the current pressure, which surrounds the price zone around 100.00 and if a pullback happens at a current stage, then we will see a fall towards the support level of 99.25. The MACD indicator is at the neutral territory.
H1 chart's resistance levels: 99.80 / 100.24 H1 chart's support levels: 99.25 / 98.82 Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the USDI breaks with a bullish candlestick; the resistance level is seen at 99.80, take profit is at 100.24, and stop loss is at 99.37.
Technical analysis of US Dollar Index for September 27, 2015
Technical outlook and chart setups: The US dollar index seems to be testing its previous resistance around 100.20 now. No doubt that the index has been following its support trend line till now but the bearish divergences seen on multiple timeframes(not shown) cannot not be ignored. A drop below the trend-line support could trigger a bearish counter-trend drop, which can result in reaching the levels of 97.80 and 96.00 as well. It is hence recommended to remain flat for now and watch for a break below 99.30. An aggressive trade setup is to initiate short positions with risk above 100.20. Immediate support is seen at 100.20 followed by 98.74 and lower, while resistance is seen at the level of 100.20 (interim) and higher respectively. Trading recommendations: Remain flat now or follow the aggressive setup scenario, which implies initiating short positions with stops at 100.40, a target is open. Good luck!
The US dollar index is grinding higher and higher but the momentum is declining. The US dollar index should make a downward corrective move soon before the next FOMC meeting. This is not the time to be long on the dollar. First we need to see a pullback.
Blue lines - bullish channel Red lines - bearish divergence The US dollar index remains in a bullish trend as the price is still above the Ichimoku cloud and inside the bullish channel. Support is found at 99.60-99.40. Red lines show how the stochastic is not following the index to new highs. This is a bearish divergence sign.
Blue lines - bearish wedge In the daily chart, we observe a bearish wedge formation as the daily stochastic is still at overbought levels. This is not the time to be bullish the US dollar index. This is the time to take profits and raise protective stops for long positions.
On the H1 chart, the USDX has been moving into a bullish bias above the 200 SMA, with a focus placed around the resistance level of 100.24, which is the nearest supply zone in the short term. That moving average is still favoring to bulls and we are still waiting for a breakout higher towards the resistance zone of 101.01. The MACD indicator is entering the negative territory.
H1 chart's resistance levels: 100.24 / 101.01 H1 chart's support levels: 99.80 / 99.25 Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the USDX breaks with a bullish candlestick; the resistance level is seen at 100.24, take profit is at 101.01, and stop loss is at 99.48.
The US dollar index is turning lower and testing the rising wedge channel support. This is the time to be bearish or neutral on the US dollar as there are signs of an approaching price reversal. I have been cautious and neutral on the US dollar for the last couple of weeks as the price did not make any significant breakout.
Blue lines - bullish channel Red lines - bearish divergence The US dollar index is testing the channel support. The stochastic has produced a bearish divergence that I've called out a couple of sessions before and that has increased our cautiousness. As I said before, this is the time for US dollar bulls to take profits and raise their stops. The US dollar index is expected to make a downward correction towards at least 97.50.
The daily chart shows how the price managed to reach the previous highs and resistance area of 100-101. A rejection here is very possible taking into account the bearish wedge pattern, which we can see in the daily chart above. The daily stochastic is at overbought levels and the index should reverse and break down below the wedge towards the kijun-sen (yellow indicator).
The US dollar index has broken down the rising wedge, and we can see a correction beginning. I have warned bulls that they should be cautious and raise their protective stops. With NFP on Friday and with the ECB press conference scheduled for tomorrow, this week is very possible to be very volatile.
Blue lines - bullish channel Red lines - bearish divergence In the 4-hour chart above we can see that the US dollar index has broken down the bullish channel. However, the price still holds above the Ichimoku cloud. Short-term resistance is seen at 100.17, while the index is now trading at 99.85. Support is found at 99.60 and at 99.45.
In the weekly chart above we can see that the index has reached the previous highs and shows signs of rejection and reversal. The weekly stochastic is oversold but has not yet generated a sell signal. It has only given us a warning that there are increased chances of a reversal. Weekly support is found at 99 and below that level we will find support at 98.
On H1 chart, the USDX is finding dynamic support at the 200 SMA. A rebound is expected in coming hours because of the current strengthening in the US dollar. A breakout above the level of 100.24 will open the door to test the key high around the level of 101.01. However, if a bearish consolidation happens below the level of 99.80, then we can expect a fall towards 99.25.
H1 chart's resistance levels: 100.24 / 101.01 H1 chart's support levels: 99.80 / 99.25 Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the USDX breaks with a bullish candlestick; the resistance level is seen at 100.24, take profit is at 101.01, and stop loss is at 99.48.
