I hope that you are all well and that you all had a successful week in the markets last week. We saw some great movement which led to myself banking some nice profit, some of which was posted in our telegram channel and on instagram.
In this article i will be taking an overview of the US Dollar index and where we could possibly see price head to over the next week.
First off all it is key to take note of the weekly candle close which closed as a strong bullish candle following the previous weekly large bullish pin bar characteristic candlestick.
So baring that in mind and now going down to the daily timeframe we can see that price over the last week showed an extremely large amount of bullish movement. We saw 3 areas of resistance broken to the upside where price on Friday closed above the area of 12250.
Price last week made its way to the previous high at the area of 12280. I have highlighted this with the blue box.
Price on Friday was rejected from this area which will be seen clearer on the 4 Hour timeframe.
Looking at our 20 & 50 EMA’s we can see that price is clearly above them and they have just crossed back to the upside. Price has also recently shown a 200EMA rejection.
Now going down to the 4 Hour timeframe we can see that price on Friday showed a rejection off the12280 resistance and has come back down to the 12250 support area also spiking the 20EMA.
Price from here can now go two way’s, we could see price continue to the upside back to the area of 12280 with the potential of breaking to the upside towards the area of 12300. Further break of 12300 would open space for price to show potential of heading towards the 12345 area.
On the other hand if price was to show a break of the 12250 support we could then expect to see price back down to the 50EMA or 12217 support.
Just to reiterate what i have mentioned in previous posts, the reason i look at the US Dollar index is to highlight whether the Dollar is showing strength or weakness to be used in correlation with USD pairs.
James at Technical FX103