U.S. Dollar Index Weekly Outlook + BIG Long Move Possible?
The US-Dollar Index is in an intact impulsive long trend. After the weekly break of the sideways range a pull back towards the break out level or in other words around 100-100.5 zone was initiated.The possible upside breakout of the 1 ½ - year sideways range also underlines the current situation within the US-Dollar. After the Federal Reserve stopped QE 3 in October 2014 and started to think about rising rates the currency moved in a sideways range of uncertainty about a next potential rate hike. As the FED said that economic data should be waited to recover. For one and a half year the market moved in a range between 92-100. This is also shown in all USD-crosses such as the EUR/USD, that the USD made choppy moves on weekly time frames.
After the market indicated an upside move and a potential fundamental driver of the US election, the market finally broke out of the sideways range and closed above 100 on a weekly basis which confirmed the breakout. After the FED rose rates in December 2016 for another 25 basis points, market reacted with further upside movement. This fundamental driver gave technicals a sustainable kick to the upside. For the near term, fundamental drivers play with the question of the next rate hike by the FED and tax policy by President Trump, which will affect the US-Dollar heavily as well. We definitely keep an eye when evaluating new mid-longterm bullish US-Dollar trades.
However, currently market flirts again with the break out zone and seems to start its bullish move to the upside. BUT for an clear confirmation of a new start of an impulsive move the local highs ofaround 103 should be broken with a weekly close price, then we could easily see next weekly resistance of 107.75-110 with a potential pullback before. 107.75-110 is the price target of the projection from the sideways range. Bullish candle formation in weekly chart confirms that this breakout might not be a fake one. This indication told us that the uptrend might give a little pullback to the downside before continue due to an overbought market. This scenario is currently for some weeks of flirting with the resistance. We currently await for two scenarios for the DXY. Two scenarios:
- Market finds support and initiates further bullish movement and breaks the resistance zone of local highs at 103.8 (break out highs). This would be a continuation move that the next impulsive the long side has been confirmed.
- Market corrects a little further to the downside and holds support around drawn trend line after initiating further bullish momentum
We remain bullish on long-term.
As we look at our intermarket indications we could get confirmed with our statement, as they currently cooling down from capital outflow.
We always mention the importance of intermarket flows, as we believe that investors only repark their money due to sentiment and global macroeconomic conditions. Therefore, we always keep in mind the in-and outflows with the help of our intermarket indications that lead us towards better timing when making a trading decision. As you might know that timing is one of the most important things when it comes to trading.
As seen in the chart, our two of our intermarket indications showing a cool down of capital outflows and currently moving in buying territory which might indicate a soon inflow of capital towards other asset classes. We take into account always the BIG 4: Currencies, Bonds, Stocks and Commodities.
As always, trading is a probability game nobody is 100% and always use a stop-loss when trading. Trade with care.
After the market indicated an upside move and a potential fundamental driver of the US election, the market finally broke out of the sideways range and closed above 100 on a weekly basis which confirmed the breakout. After the FED rose rates in December 2016 for another 25 basis points, market reacted with further upside movement. This fundamental driver gave technicals a sustainable kick to the upside. For the near term, fundamental drivers play with the question of the next rate hike by the FED and tax policy by President Trump, which will affect the US-Dollar heavily as well. We definitely keep an eye when evaluating new mid-longterm bullish US-Dollar trades.
However, currently market flirts again with the break out zone and seems to start its bullish move to the upside. BUT for an clear confirmation of a new start of an impulsive move the local highs ofaround 103 should be broken with a weekly close price, then we could easily see next weekly resistance of 107.75-110 with a potential pullback before. 107.75-110 is the price target of the projection from the sideways range. Bullish candle formation in weekly chart confirms that this breakout might not be a fake one. This indication told us that the uptrend might give a little pullback to the downside before continue due to an overbought market. This scenario is currently for some weeks of flirting with the resistance. We currently await for two scenarios for the DXY. Two scenarios:
- Market finds support and initiates further bullish movement and breaks the resistance zone of local highs at 103.8 (break out highs). This would be a continuation move that the next impulsive the long side has been confirmed.
- Market corrects a little further to the downside and holds support around drawn trend line after initiating further bullish momentum
We remain bullish on long-term.
As we look at our intermarket indications we could get confirmed with our statement, as they currently cooling down from capital outflow.
We always mention the importance of intermarket flows, as we believe that investors only repark their money due to sentiment and global macroeconomic conditions. Therefore, we always keep in mind the in-and outflows with the help of our intermarket indications that lead us towards better timing when making a trading decision. As you might know that timing is one of the most important things when it comes to trading.
As seen in the chart, our two of our intermarket indications showing a cool down of capital outflows and currently moving in buying territory which might indicate a soon inflow of capital towards other asset classes. We take into account always the BIG 4: Currencies, Bonds, Stocks and Commodities.
As always, trading is a probability game nobody is 100% and always use a stop-loss when trading. Trade with care.
