The US dollar index made a reversal at the level of 99.25 where the 61.8% Fibonacci retracement resistance was found for a decline from 100.50 to 97.20. Bulls can still move this index higher, but bears are currently in control of this reversal.
The index found short-term support at 98.20 that bulls need to hold in order to move upwards at 97.20 and continue moving higher. On the other hand, bears have managed to reverse trend lower. However, they need to break below an important low of 97.20 to gain control of the short-term trend.
Blue line - long-term resistance The weekly chart remains bullish as the price is above the Ichimoku cloud and both the tenkan- and kijun-sen indicators. However, there are signs of reversal as the price is testing the tenkan-sen support level and the stochastic oscillator is turning lower from overbought levels. Bulls need to be very cautious, and if I was long I would exit if 97.20 was broken,
The USDX is looking for an opportunity to find bottom around the level of 98.66 where a rebound can happen towards new highs. Because of that we should see a breakout above the level of 99.48 first for a huge rally. Another scenario is calling for a decline towards the support zone of 98.14, which is located below the 200 SMA on the H1 chart. The MACD indicator is in the negative territory.
H1 chart's resistance levels: 99.19 / 99.48 H1 chart's support levels: 98.66 / 98.14 Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the US dollar index breaks with a bullish candlestick; the resistance level is seen at 99.19, take profit is at 99.48, and stop loss is at 98.86.
Daily analysis of USDX for December 22, 2015
On H1 chart, USDX is trying to do another bearish consolidation below the 200 SMA, but it seems the bullish outlook remains alive, at least during the Christmas's week. However, that scenario should be invalidated when a breakout happens around the 98.14 level, which would deliver a push lower towards the 97.86 level. MACD indicator is entering oversold conditions.
H1 chart's resistance levels: 98.66 / 99.19 H1 chart's support levels: 98.14 / 97.16 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 98.66, take profit is at 99.19, and stop loss is at 98.14.
The USDX had a bearish trend during Tuesday's session, after a decline below the 200 SMA on the H1 chart. Currently, the support zone is placed around the 98.14 level, where a rebound can happen towards the resistance level of 98.66. However, we should prefer to stay sideways, as the Index is trapped inside a very volatile territory. The MACD indicator remains positive.
H1 chart's resistance levels: 98.66 / 99.19 H1 chart's support levels: 98.14 / 97.16 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 98.66, take profit is at 99.19, and stop loss is at 98.14.
On H1 chart, USDX is finding strong support at the 98.14 level, where a rebound is expected to re-test the resistance level of 98.66. We should remind you that a higher rally is expected to try a bullish consolidation ahead of the New Year Eve. However, if the index manages to break the 98.14 level, then it's possible to do a decline towards the 97.86 level. MACD indicator is entering the neutral territory.
H1 chart's resistance levels: 98.66 / 99.19 H1 chart's support levels: 98.14 / 97.16 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 98.66, take profit is at 99.19, and stop loss is at 98.14.
The bias is very bearish on the H1 chart and the USDX seems to be very active in the bearish trend, as the 200 SMA offered a strong dynamic resistance during the last week. Currently, a bottom can be found around the level of 97.86, where a breakout lower will expose the index to test a low of 97.66 in a short-term basis. The MACD indicator is in the neutral territory.
H1 chart's resistance levels: 98.14 / 98.66 H1 chart's support levels: 97.86 / 97.66 Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USDX breaks current levels with a bearish candlestick; the support level is found at 97.86, take profit is at 97.66, and stop loss is at 98.05.
On the H1 chart, the USDX remains finding support at the level of 97.86, which is a key zone for buyers on a short-term basis. However, if the index achieves in breaking that zone to the downside, then the bearish bias will strengthen eventually reaching the level of 97.00.
H1 chart's resistance levels: 98.14 / 98.66 H1 chart's support levels: 97.86 / 97.66 Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USDX breaks with a bearish candlestick; the support level is found at 97.86, take profit is at 97.66, and stop loss is at 98.05.
Our short-term outlook for the USDX remains bearish because the 200 SMA on the H1 chart is still acting as strong dynamic resistance, and by the way, we should still follow the downside bias. Also, the current fractal structure is calling for a bearish trend, which will receive some kind of New Year Eve's aftermath momentum. The MACD indicator is entering the negative territory.
H1 chart's resistance levels: 98.14 / 98.66 H1 chart's support levels: 97.86 / 97.66 Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the US dollar index breaks with a bearish candlestick; the support level is found at 97.86, take profit is at 97.66, and stop loss is at 98.05.
On the H1 chart, the USDX is trying again a bullish consolidation above the 200 SMA, looking to rally towards the resistance level of 98.66. However, at the current stage we can expect a pullback to resume the short-term bearish bias, because an overall structure is still favoring this scenario. There is a strong demand zone around the level of 97.86.
H1 chart's resistance levels: 98.66 / 98.90 H1 chart's support levels: 98.14 / 97.86 Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USDX breaks with a bearish candlestick; the support level is found at 98.14, take profit is at 97.86, and stop loss is at 98.43.
The US dollar index has started the year in a very defensive position as sellers push it lower towards important short-term support at 98. The short-term picture is mixed and traders should be very cautious as if sellers find no resistance from buyers, then we should not cancel out a move back towards 96.
Blue line - trend-line support The US dollar index is testing the blue trend-line support and the Ichimoku cloud support at 98. A break below this support will push the index towards 97, which is the next important horizontal support. Breaking below it will open the way for 96.
The weekly chart shows us that if this week continues as bad as it started, we should be expecting the US dollar index to move towards the weekly kijun-sen (yellow indicator) support at 96.60 and maybe lower towards 96 at the upper weekly cloud boundary. Resistance is at 99 and it must be broken in order to have a confirmed bullish reversal with eyes on new highs next.
