Analysis of USDX The USDX fell 1.3% at yesterday's session, after a strong two-day pullback. At yesterday's session, we forecasted bearish views on USDX & USD related pairs. The index is making a mild distribution pattern at 96.55. We add further bearish views on the USDX. Until the Index closes below 96.90, bears will aim at 93.90, 92.75, and 92. The strong support zone is found at 92.15 and 91.70. In the daily chart, lower lows and lower highs formation has been expanding. Today, bears try hard to close below 95.00 with a target at 93.90.
As expected, the US Dollar Index stopped its decline yesterday at the previous low and support at 94.70. But today we can observe a new low and a breakdown. This is a bearish sign as the Index has reversed from the 61.8% retracement and got rejected at the cloud resistance. The correction in the US Dollar Index is going to be deeper and a low of 93.10 is going to be in danger. There are increased probabilities of a move below that level and towards 90.
The US Dollar Index is making lower lows and lower highs. The price got rejected at the 61.8% retracement and I warned of the possible reversal from that level. The price got also rejected at the cloud resistance. Now, it is moving towards new lows and this implies more downside to be expected.
The weekly chart is turning bearish and approaching the kijun-sen important support. A weekly close below the kijun-sen will increase the chances of a break below 93.10, which is a low made in early May. A target is around the 50% retracement and the cloud support of the weekly chart. Resistance is at 97-97.80. As long as the price is below that level, bears will be in control.
The USDX is currently trading above the support level of 94.66 and there is a strong fight between bears and bulls, because the Index could do a rebound at current levels. Thanks to a possible bullish momentum, which could give that support zone mentioned above. The MACD indicator is in the negative territory.
There are no major changes in the short-term outlook for the USDX, but the Index is still moving above the support level of 95.15, a zone which rejected the US Dollar Index during yesterday's session. Currently, we should expect a rise towards the resistance level of 95.71 and a breakout could happen there in coming hours.
Daily chart's resistance levels: 95.74 / 96.97 Daily chart's support levels: 94.66 / 93.75 H1 chart's resistance levels: 95.71 / 96.16 H1 chart's support levels: 95.15 / 94.63 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 isseen at 95.71, take profit is at 96.16, and stop loss is at 96.32.
The US Dollar Index hit a new lower low yesterday, but reversed higher above 94.80 again. This fake breakdown is not a good signal for bears and yesterday's low at 94.30 was as important as the May low at 93.10.
The US Dollar Index reversed from the 61.8% retracement reached a new lower low. Now, it is moving higher. Resistance is found at 95.70 by the Ichimoku cloud and the kijun-sen indicator. Bulls will have to break above this level and above the cloud resistance of 96.20 in order to make the trend bullish.
The weekly chart has nearly reached the weekly kijun-sen indicator support (yellow line) and bounced. If we manage to hit new lows this week, we should expect 93.10 to get broke. The Index is seen to be push lower towards 90.
It seems the USDX could extend the lower continuation for several days more, because the Index is looking to break the support level of 94.66 in order to fall until the 93.75 low level in the daily chart. The 200 SMA is currently bullish and the overall trend is still pointing to the upside. However, in the mid term, we could expect more donwsides before the rally resumes.
In the H1 chart, the outlook is bearish in the short term, as the USDX is looking to develop a lower low pattern for a fall towards the support level of 94.33. Now, the Index is trying to recover from the recent losses, but the 200 SMA is still bearish and it could be supporting future lower continuation in the USDX structure. The MACD indicator is still in positive territory.
Daily chart's resistance levels: 95.74 / 96.97 Daily chart's support levels: 94.66 / 93.75 H1 chart's resistance levels: 95.15 / 95.71 H1 chart's support levels: 94.63 / 94.33 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 at 94.63, take profit is at 94.33, and stop loss is at 94.93
The US Dollar Index bounced strongly towards 95.60 after the fake breakdown below 94.65, but got rejected by the kijun-sen indicator. As long as the price is below the recent high and below the Ichimoku cloud,a trend will remain bearish with increased chances of breaking below 94.65 again.
Red line = trend line resistance The US Dollar Index is moving towards lower lows and lower highs. The trend is bearish for the short-term. The price is below the Ichimoku cloud and below the red trend-line resistance. It reached the cloud resistance yesterday and got rejected. This was not a good sign. Support is at 94.85 and at 94.65. If we break below these levels, there will be increased risk of a new low below 93.10.
A new low below 93.10 will open a way for a deeper correction as shown in the weekly chart above towards the 50% Fibonacci retracement and towards the 90 price level. The kijun-sen weekly support is found at 94.05. A weekly close below that level will be a bearish signal.
USDX The recent retail sales data shows the US economy is expanding in a steady pace. This data may improve a stance on the interest rate hike. But data is unable to produce strong upticks in the US dollar. The rise in the retail sales was mainly boosted by changes in jobs number. Report on jobless claims produced an uptick of1000. At yesterday's session, the USDX and USD related pairs lost a half of the intraday gains wiped on. Intraday support is fond at 94.85 and 94.30. Resistance is seen at 95.10 and 95.25. The USDX and the USD/CAD H1 charts look similar. In case the hourly candle closes above 95.60, bulls will drive towards 96.00 and 96.50 initially, and to 97.00 later. On the downside below 94.80, bears are likely to aim at a new low at 93.50 within support at 94.30.
USDX is currently finding strong support around the 94.66 level. Now, the index could rally towards the resistance zone of 95.74. This week will be very decisive for the current trend of USDX on this time frame because it could resume the bullish bias in the coming days with a huge rebound. MACD indicator is on the negative territory.
The short-term outlook is still bearish on the H1 chart because the index is trading below the 200 SMA, but now it's finding resistance at the 95.15 level. Now, USDX could fall until the support level of 94.63 where also it could perform a breakout and do a new low to the 94.33 level, which is the next bearish target in the short term.
Daily chart's resistance levels: 95.74 / 96.97 Daily chart's support levels: 94.66 / 93.75 H1 chart's resistance levels: 95.15 / 95.71 H1 chart's support levels: 94.63 / 94.33 Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USD Index breaks with a bearish candlestick; the support level is at 94.63, take profit is at 94.33, and stop loss is at 94.93.
USDX remains in bearish trend despite a try by the bulls to regain short-term trend last week. Important resistance levels to watch are found at 95.60 and 96.20. Support to watch out for is at 94.65 and 93.10.
Red line - resistance The Dollar index is below the cloud resistance. Price is also below the red trend line. Short-term trend is bearish. Unless we see a break above 96.20 I will remain neutral or bearish. Short-term resistance at 95.60 if broken will change trend to neutral. Support at 94.60 if broken will put 93.10 to the test. This implies that a bigger correction should be expected until the end of June.
The weekly chart remains weak. Price is testing the kijun-sen weekly support at 94.80. A weekly close below 94.80 will imply a bearish move should be expected towards the cloud support at the 90 price level. The 50% retracement is important support so we should a push towards that level if we break below 93.10.
The USDX posted a weekly loss of 1.5% on the week ended June 12. The index closed below 20Wsma which seems to be at 96.30. On the daily chart, the index closed below daily moving averages. For the recent 3 straight sessions, the index was rejected at 100Dema 95.00. Ahead of the busy economic calendar this week, the index opened above 100Dema at Monday's session. Traders focus on Wednesday's FOMC meeting. The recent retail data and jobs data raises the Fed key interest rate hike expectations. We expect the US Fed to announce the key interest rate hike between September and December. Today, industrial production, NAHB housing market index, capacity utilization rate, and empire state manufacturing index are due. On the daily chart, lower highs and lower lows formation are expanding. Intraday support is found at 95.00 100Dema and 94.60. Resistance seems to be at 95.50 and 96.00. Buying is available above 95.40 with targets at 95.70 and 96.00. Today, bulls will show strength only above 96.10. Selling is possible below 95.00 with targets at 94.70, 94.30, and 94.00. With a daily close above 96.10, bulls are aiming at 97.00 and likely 97.50. The real bullish momentum is possible only above 97.70 on a closing basis for 103.00.
