At daily chart, the USDX is currently inside a corrective range, where we are currently watching downside moves in favor of the overall bullish bias. There is also a higher high pattern formation in this time frame and bear in mind that a breakout around the level of 97.57 will open doors to the resistance zone of 98.29.
The short-term picture is giving us a possible buy trade idea, because the Index is finding dynamic support at the 200 SMA on the H1 chart. However, the USDX is dealing with the resistance level of 97.53. If the Index achieves a break in that zone, it would be expected to test the zonr around 97.77 in coming days. The MACD indicator is entering the negative territory.
Daily chart's resistance levels: 97.57 / 98.29 Daily chart's support levels: 96.57 / 95.63 H1 chart's resistance levels: 97.53 / 97.77 H1 chart's support levels: 97.12 / 96.73 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 at 97.53, take profit is at 97.72, and stop loss is at 97.31.
The US dollar index pulled back towards the 97-96.80 area as we expected from our previous analysis. There are increased chances that the uptrend will resume strongly as soon as we are right above support area. A move lower in the US dollar index will put the bullish scenario in danger.
Black lines - bullish channel The US dollar index is still trading inside the upward sloping channel as shown in the 4-hour chart above. The price has reached the Ichimoku cloud support and has stopped the decline. The short-term resistance is found at the kijun-sen (yellow indicator) at 97.55. Breaking and closing a 4-hour candle above this level will be a bullish sign.
Blue line - resistance The weekly chart continues to remain bullish despite this week's red candle. The price has tested resistance and pulled back towards the kijun-sen support for a back test. Bulls want to see now a weekly close near this week's highs in order to be more bullish next week. On the other hand, bears want to see the price break below the kijun-sen at 96.80 but I believe this will be very difficult with commodity currencies and GBP/USD being under pressure.
Although the US dollar index was in a strong short-term bullish trend on Friday, it failed to close above the 97.50 resistance area and got rejected. The rejection caused weakness and the pullback got deeper towards the lower channel boundary of 96.50. The trend is bearish but with increased chances of a trend reversal.
Black lines - bullish channel The US dollar index is in a bearish trend and in a difficult and crucial spot for bulls. The price is making lower lows and lower highs. The price is below the Ichimoku cloud on the 4-hour chart and was rejected at the kijun-sen (yellow line) resistance. The next support is at the lower channel boundary at 96.35. The most important support level is however the low at the 95.50 area made in early July.
Blue line - resistance The weekly chart is getting dangerously bearish. The price got rejected at the blue trendline resistance and has now broken below the weekly kijun-sen support. Although it is early in this week's candle, breaking below the tenkan-sen (red line indicator) at 95.80 will be a bearish signal. Bulls need to step in and reverse trend otherwise the longer-term bullish scenario will be in danger. A break below 95.50 could imply that we could even see a new weekly low towards 90 as the form of the rise from 93.10 is corrective and not impulsive.
Although the US dollar index was in a strong short-term bullish trend on Friday, it failed to close above the 97.50 resistance area and got rejected. The rejection caused weakness and the pullback got deeper towards the lower channel boundary of 96.50. The trend is bearish but with increased chances of a trend reversal.
Black lines - bullish channel The US dollar index is in a bearish trend and in a difficult and crucial spot for bulls. The price is making lower lows and lower highs. The price is below the Ichimoku cloud on the 4-hour chart and was rejected at the kijun-sen (yellow line) resistance. The next support is at the lower channel boundary at 96.35. The most important support level is however the low at the 95.50 area made in early July.
Blue line - resistance The weekly chart is getting dangerously bearish. The price got rejected at the blue trendline resistance and has now broken below the weekly kijun-sen support. Although it is early in this week's candle, breaking below the tenkan-sen (red line indicator) at 95.80 will be a bearish signal. Bulls need to step in and reverse trend otherwise the longer-term bullish scenario will be in danger. A break below 95.50 could imply that we could even see a new weekly low towards 90 as the form of the rise from 93.10 is corrective and not impulsive.
The daily chart structure remains pointing to the upside, but the current pullback could extend towards the support zone of 96.57, as the Index is trying to correct that strong bullish bias held several weeks ago. The 200 SMA is still bullish and we should expect more upside in the long term, but for now, the bearish path could be the strongest one.
The USDX is expected to move sideways in the short term, because the Index is trading between the price zone established by the 200 SMA on the H1 chart. Anyway, a breakout below the support level of 97.12 will open doors to visit the level of 96.73, a zone which hasn't been tested by the USDX since July 15.
Daily chart's resistance levels: 97.57 / 98.29 Daily chart's support levels: 96.57 / 95.63 H1 chart's resistance levels: 97.53 / 97.77 H1 chart's support levels: 97.12 / 96.73 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 at 97.53, take profit is at 97.72, and stop loss is at 97.31.
The US Dollar Index continues to extend the bearish correction and now it is facing the support zone of 96.57. If a breakout takes place there, it would be expected to visit the level of 95.63 in coming days. For now, we should expect rebounds in order to correct the bearish bias in a minor degree. The MACD indicator is entering the negative territory.
On the H1 chart, there is a bearish pattern formation below the resistance level of 96.73. Currently, we're expecting a breakout in the support zone of 96.33, which could open the road to test the next bearish focus around the level of 95.67. There is a strong intraday bearish structure in place and it should be traded very cautiously.
Daily chart's resistance levels: 97.57 / 98.29 Daily chart's support levels: 96.57 / 95.63 H1 chart's resistance levels: 96.73 / 97.12 H1 chart's support levels: 96.33 / 95.67 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 97.53, take profit is at 97.72, and stop loss is at 97.00.
The US dollar index is inside the upward sloping channel and is testing the lower channel boundaries. In the Ichimoku cloud terms, the price is in a bearish trend and has given a new short-term sell signal by breaking below the cloud. The US dollar is showing some signs of strength and is trying to bounce from the lower boundaries of the channel.
Black lines - bullish channel The US dollar index is in a short-term bearish trend as it makes lower lows and lower highs since July 21. The price has broken below the kijun-sen and tenkan-sen support indicators and now is trading below the Ichimoku cloud. Bulls are trying to push the price back inside the cloud. The bullish channel is intact for now; and as long as the price remains inside this channel, bulls will be in control. Critical support is at 96.30. This recent low is also the 38% retracement of the rise from 93.60.
Blue line - horizontal resistance The US dollar index got rejected at the horizontal resistance at 97.80 and pulled back towards the kijun-sen and tenkan-sen. Support is crucial in this area and a bounce will increase the chances of a real breakout above 98. A weekly close below 95.80 could be a sign of more selling to come towards even the weekly cloud support at the 91-90 level. Important day for the US dollar is tomorrow as the FOMC meeting will be held.
On the daily chart, the support level of 96.57 remains untouched, as the Index is still trading above that important zone, but be cautious with the current downside corrective moves held in this time frame. That is why we should be aware of a possible breakout around that support level, in order to reach a new low towards the level of 95.63.
The USDX did some bullish corrective moves during Tuesday's session and it's currently being rejected by the resistance zone of 96.73. A fall towards support level of 96.33 will put to the USDX in the bear's focus, because a breakout could happen there in order to reach new lows (the level of 95.67). The MACD indicator is still in the negative territory.
Daily chart's resistance levels: 97.57 / 98.29 Daily chart's support levels: 96.57 / 95.63 H1 chart's resistance levels: 96.73 / 97.12 H1 chart's support levels: 96.33 / 95.67 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 96.33, take profit is at 95.67, and stop loss is at 97.00.
Ahead of the FOMC meeting, USD is under pressure. Investors took profits on its recent gains. The index closed below 20Dsma, but managed to hold above the 100Dsma. Deutsche Bank strategist Dominic Konstam: market showed "concern for the Fed's policy failures," yield curve flattening and a decline in the stock market and commodities is evidence, based on the dollar the Fed's rate hike, "is to bring down inflation effect" ; the Fed's first rate hike will be postponed until 2016 because of "the risk of a premature rate hike far outweigh the risk of waiting." HSBC: Federal Reserve coming closer to the interest rate hike, a stronger dollar, low inflation, China's and India's weak demand for physical gold and other factors weigh on gold prices. Technical view: The 50Dsma is found at 96.00 and 100Dema is seen at 95.60. Intraday support is found at 96.10 and 96.00. The weekly support is seen at 96.30 (Monday's low). On an intraday basis, in case if bulls lose the level of 96.00, the index is likely to drag towards 95.70 and 95.30. It is likely to close above 95.60 by the end of the day. Until the index closes above 95.60, buyers will enjoy the upper hand.
The US Dollar Index is a bit stronger than the previous days but traders need to be very cautious today as we expect volatility to rise after the FOMC meeting tonight. The US Dollar Index is trading right above the short-term support. I prefer to be neutral during the days like this and wait for an opportunity to take a position after the FOMC meeting.
Black lines - bullish channel The US Dollar Index is trading right on top of the lower boundary of the bullish channel. The index is also trading below the Ichimoku cloud. Yesterday, it tried to enter the cloud, reached the kijun-sen (yellow indicator), and got rejected. The price pulled back towards the lower boundary again and now we see another bounce towards the cloud. USDX is also trading around the 38% Fibonacci support. With the FOMC meeting tonight we will see a breakout of the support or a strong upward bounce. The levels to watch for are 96.30 and 97.65.
Blue line - resistance The US Dollar Index is trading below the kijun-sen (yellow indicator). Next support is seen at 95.85 at the tenkan-sen (red indicator). The price is in danger of making a false breakout and a deeper correction towards the Ichimoku cloud support at 90. I would expect things to clear up tonight.
