USD Indx - There is no trend without some profit taking

INDEX:DXY   U.S. Dollar Index
198 5 5
- Bullish Ichimoku setup, with supports at 98,00 / 97,15 / 95,20
- First warning Heikin Ashi candle since the bullish break above 97,15. Today there is a chance for a small doji , or maybe a red candle. haDelta has been decreasin for last 5 days, which means the bull is slowly losing its extreme power.

Get ready for some increased volatility in USD. Market will likely move sideaway in a bit more volatile range, or will produce a pull back to 97,15-98,00 support area

There are early signals for a possible weakness in Price action:
- Ichimoku setup is slowly turning less bullish , with Chikou Span hitting Price candles soon.
- Since the rally started from 95,00, this may be the first time that we see a candle close below Kijun Sen
- ADX decreasing (DMI is still positive)
- Heikin Ashi candles are red ina row, more importantly haDelta is stuck below zero line

Still positive:
- Kumo is far below Price and relatively thick. 100 WMA also far below Price
- The 4H bullish trendline is intact

My first impression is that a correction to 98,00 - 98,20 is possible. There we'll have to check price action again.

Suggestion: Time to take profit on USD Longs for now. Re-enter longs later in case we see buy signals at daily supports.
You can also enter small short, but use very wide stop (means you really need to do it in small, like 1/3 trade unit only, not to get hit by increasing volatility ), but be careful, as you see there is no proper sell signal, just trend exhaustion signals, so a short has to be considered like a top hunting again.

p.s.: Naturally for EURUSD             all the above is valid in inverse relation.
100 is a psychological level...although i was anticipating a retracement already at 99...seems strong
Well, the FED will decide. Or actually let's say the price action after FED announcement.
This was the strongest one way trend in the last 34 years. Needs to chill down a bit at some point.
The big trend will not change, but there is chance we see a lot more volatile USD in coming months. This was such an obvious long lasting consensus trade, that I assume the whole world is masively loaded USD longs by now. Once we can see a trigger what causes a quick and massive profit taking. Later of course real long term trend followers will re-buy USD again.

Anyway, I don't think the next 3-5 months will be as obvious as the last 10 months were.
+1 Reply
IvanLabrie Kumowizard
100% agreed.
menorad Kumowizard
Excellent timing !!!
Well, kind of luck as well. I tried to call a top a few times already to be honest.

By the way, Daily Kijun Sen and 4H Kumo held as support. On 4H back to the cloud top now.
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