The US dollar index remains in a bullish trend but it is very fragile. There are many signs that a reversal could start any time soon, so it is preferred for bulls to raise their stops and protect their profits.
Blue lines - bullish channel The US dollar index is trading inside a bullish channel and is above the daily cloud. Daily support is found at 98.80 and next one at 96.77. So, a daily close below 98.80 will open the way to a short-term correction lower. Crucial support for bulls is seen at 93.80.
The weekly chart shows that this week's candle is testing the important resistance area around the previous highs. A new higher high is very probable but bulls should be cautious and protect their positions by raising their stops. The trend is bullish, but there are also signs that we must be cautious.
The US dollar index continues to trade below the resistance zone of 99.80, with no major moves after the FOMC minutes. The 200 SMA is in the H1 chart. However, the USDX is still focused on reaching new highs above the level of 100.00. By the way, if the index continues to trade inside the bullish bias in coming days, then it could rally towards the level of 100.25.
H1 chart's resistance levels: 99.80 / 100.25 H1 chart's support levels: 99.25 / 98.31 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 99.80, take profit is at 100.25, and stop loss is at 99.37.
The US dollar index showed a short-term reversal sign yesterday by breaking out the short-term upward sloping channel. The US dollar has weakened a bit, but it holds important short-term support at 99 now.
Blue lines - bullish channel Red lines - bearish divergence The US dollar index is still trading above the Ichimoku cloud but has broken the bullish channel. The US dollar index however holds above the 99.10 support. Resistance is seen at 99.50 and next the recent high at 99.85.
Red line - support 99.10 The US dollar index daily chart shows the important support level of 99.10. If it gets broken, we should expect a pullback towards at least 97. Stochastic is overbought and chances for bearish reversal are very high. Bulls should raise their stops to 99.10 and protect their profits.
The USDX is trying to perform a rebound above the support level of 98.82, because of the price action offered by the 200 SMA on the H1 chart. At the current stage, we shall expect a rally until the resistance level of 99.25, where a breakout could offer another bullish bias towards the level of 99.80, which is a key interest zone of the sellers in the short-term. The MACD indicator is entering the neutral territory.
H1 chart's resistance levels: 99.25 / 99.80 H1 chart's support levels: 98.82 / 98.31 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 99.25, take profit is at 99.80, and stop loss is at 98.70.
The US dollar index broke support yesterday after backtesting resistance at 99.50. Bulls are vulnerable here as there are a lot of chances to see a deeper correction towards at least 97. For now, bulls are still in control as the price is above 99 again holding cloud support.
Blue lines -bullish channel Red lines - bearish divergence The US dollar index is above the cloud thus bulls are still in control. The bullish channel is broken. Support is found at 99, so a daily close below that level will open the way to a deeper correction. Short-term levels are oversold, so we could see another bounce towards 99.50 today.
Red line - support The US dollar index broke below the red TL support but is trading back above it now. A lower low relative to yesterday will open the way to a push lower towards the green area shown in the daily chart above. The levels of 97.50-97 are my target area in the short term.
USDX technical analysis for November 23, 2015
The US dollar index reached a new higher high today as we expect some critical news for the dollar to come after the surprising Fed meeting that will take place today. Rates are forecasted to be raised earlier than expected. Why else would the Fed hold a surprise meeting?
Blue line -support The US dollar index is trading above support at 98.75 and above the Ichimoku cloud. A trend is bullish. The price is moving towards higher highs and higher lows. But we also have a bearish divergence in stochastics. The price is not approaching a higher high as the index price is doing. This should raise our alert and bulls should raise their stops to protect their positions.
On a weekly basis, we are approaching important resistance levels that are expected to be broken after the Fed announcement of the rate hikes. Stochastic is overbought for that last four weeks and this produces a warning for bullish positions, but still we have no reversal signal. Just warning that bulls need to be very cautious. Betting against this market trend is also not preferred as the bullish trend is strong.
On the H1 chart, the USDX recovered from its losses held during the last week, because the index is looking for an opportunity to break the resistance level of 99.80, and we should pay a close attention to that price zone as it could unleash the bullish force in the short and medium-term. If that happens, then we can expect a rally towards the level of 100.24. The MACD indicator is at the positive 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.
The US dollar bulls might still be in control of the trend, but momentum is declining. I would expect more enthusiasm once we have broken above the recent high, but it seems a correction is needed there first before more buyers can make a real push above the level of 100
Blue lines - bullish channel Red lines - stochastic bearish divergence with new highs The US dollar index remains in a bullish trend as the price is above the Ihcimoku cloud and above both the tenkan- and kijun-sen indicators. Also, the price is trading inside a bullish channel. However, bulls need to be very cautious as we observe divergence signals in the stochastic.
No change are seen in the weekly chart. Support is found at 98.75. If it gets broken, we expect a pullback towards the kijun-sen (yellow line indicator) and towards the 38% Fibonacci retracement. The trend remains bullish. The price is still above cloud. However, bulls need to be very cautious and protect their positions.
Early on Wednesday, dollar bulls are on the defensive as sellers put pressure on the US dollar. The US dollar index is right on the top of the channel support but a bigger downward correction is justified by the daily stochastics towards at least 97.50.
Blue lines - bullish channel Red lines - bearish divergence As per our analysis of the bearish divergence signal that was given when prices were at 99.90, the US dollar index made a pullback as expected and has reached support area at 99.30, while the stochastics in the 4-hour chart have moved towards the overbought levels. The price is now testing the channel and cloud support. Breaking below 99 will open the way to 97.50.
The daily chart above shows how close to resistance we are now and how overbought the stochastic is. The level of 98.75 acts as the daily support. If it gets broken, then expect the 38% Fibonacci retracement to be tested. I prefer to be bearish or neutral than long at current levels.
The USDX is still looking for an opportunity to do another push higher above the resistance level in an effort to reach the level of 100.24. The 200 SMA remains below the current price zone, and we should see new highs in coming days. If the USDX does a breakout above the level of 100.24, then we can expect the price to reach the level of 101.01 on a mid-term basis. The MACD indicator is entering 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 USDX 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.
