USD Indx - "And now, the end is near..."

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At least for this extremely nice long bullish third wave. USD Bulls beware and think! There are serious warning signals again. If you are long, it is time to reduce. If you wanna go short USD, I know it looks tempting, but you still have to wait a bit. I show you why.

Daily: Ichimoku is still bullish , so the main trend will remain up, but this trend has gone too steep. We had a blow off candle two days ago, which was completely erased yesterday, despite we had rather bad numbers coming from Europe (and as we know EURUSD is the major component of the USD index).
Next few days canlde closes will be very important. Both the horizontal support, Tenkan Sen and the steepest trendline stay together, while MACD and Slow Stoch give a sell signal same time.
Corrective bearish tgt is 84,25.

Also very important, that volatility is quickly increasing. 20 days ATR (not shown on this chart) is up to 0,53 points from the lows of 0,18-0,27 points range seen during 2014. This means two things: when volatility is picking up that quickly, can be an early signal for a sharp correction and sometimes the reversal of the trend. Second, you MUST adjust your trading sizes not to risk too much, as trading may become even more choppy!

4 Hrs: While you may feel on the Daily chart it is already time to sell, and you may also feel you have missed it... look at this time frame. Is it a sell? No, not yet. Price down to the Kumo, but not yet even penetrated it. It is still just a consolidation with higher intraday volatility . Chikou hit Price candles, Tenkan and Kijun flat (but e.g. not yet even gave a weak bearish cross). Slow Stoch turning up from oversold. We may have to wait few more days, before the Kumo, 100 WMA and the trend line breaks same time. This is quite likely, given that for example USDJPY itself already did the same kind of break. Still even in the case of USDJPY cross, the lower low was still not yet in, so the bearish Kumo breakout is not yet completely confirmed, and in case of USD Index, in very short term some pop up from Kumo is still possible.
The level is 85,45-55! Be a snake, a panther, a crocodile! Wait, focus, and strike in time! Still you can make a mistake even then, but the probability of success will be higher!

It is never the Price (entry or exit) what really matters, but it is always the Price Action and the signals. It is better to be late, then being too early more times.


A good forcast! I have some difficulties to read the Ichimoku Kinko Hoyo imediately in front of the cloud. I would have seen it rather as a resistance in the 24h chart. Nevertheless I also saw the upmove of the Euro coming and made my deal.
Good research Kumowizard. We also agree with your view regarding possible USD weakness upcoming weeks. It is interesting to see that atleast USDJPY started to make lower highs and lower lows in 4H timeframe. Furthermore, a lot of ''bullish'' factors are built into todays USD level. Now its time to walk the talk for USD and show the world that it can defend the sentiment.

Another point we shouldn't underestimate, is that a stronger USD can actually slow down US economy.

Safe trading!
My thoughts exactly, signals are there, wait for a good pull-back... Excellent stuff Kumo, especially for new traders. Patience and discipline is key
Thank you very much. Believe me, even for old traders patience is a Key! Sometimes I still have problem with that after so many years :-)
fash Kumowizard
Yep, it is difficult to stifle those itchy trigger fingers sometimes. Wannabe traders should be patience tested before they start. Like how long can they suck on a fruit pastille without chewing...

My thoughts on DXY are that we have just broken out of major multi-year channels, there will be a lot of residual strength in the index, especially given last weeks NFP

We are holding onto a strong daily trendline too. All these will break if we close and hold below 85.50-60 critical support. We are yet to break the 200ma on the hourly and just double-bottomed with a hammer-ish candle too!l Worth waiting and watching for now...
Yes also Gold reached a critical resistance today after the massive buying. Recently I find gold as a very good indicator, as the moves by some reason always come earlier than in EURUSD or USD Indx respectively.