In this blog we will be taking a look at the US Dollar Index on the Monthly Timeframe.
The US Dollar index peaked to 12634 during December 2016 – January 2017. The month of January 2017 closed as a large bearish engulfing candlestick which has since led to several months of decline through 2017. 2017 was a bearish year for the US Dollar and so far that has continued into 2018.
The month of January is still open however, on the lower timeframes we have seen price show further bearish movement.
On the chart above you can see that we have placed a key area of support around the 11700 area. This area is a previous rejection level which has pushed price back to the upside in the past. Remember “History Repeats Itself” which is clearly evident with this level by looking left.
So as price now approaches this key level we have the potential of either a break of a rejection. A break would clearly lead to further bearish movement and weakness within the US Dollar. However, a rejection back to the upside would push price back into the area we have seen price through 2016 and 2017.
At the area of the key support, we also have our ascending trendline. This trendline also shows a barrier and would need to be broken to the downside to highlight further bearish movement.
The months of January and February are key monthly candle closes to keep an eye on, as they could be key to showing a signal to whether price is going to show further bearish movement or be rejected back to the upside.
This is our current monthly perspective of the US Dollar Index and we are watching how price reacts at the key barriers which we have mentioned above over the next few months.