HughGRection
Long

USD appears corrective at pivotal support

INDEX:DXY   U.S. Dollar Index
206 4 1
- After correcting at the previous 2 year trend line and 200 day MVA, the dollar has found support at the 0.382 Fibonacci retracement . If you take a look back over the past couple years, this has been an area of pivotal support/resistance numerous times. I expect a bounce from this level to retest and possibly even break the previous trend line as long as the RSI remains bullish ( > 50).

- From a fundamental perspective, it could be assumed that the USD will be moving downward given the ultra dovish initial commentary from Yellen. This is definitely a risk, but considering all the voting FOMC members views on QE , there is more of a consensus that the taper should have already begun.

- Cyclical, with an insanely overbought equities market, I expect profit taking through the end of the year to further support the USD. As always this is only what I view as the most likely scenario. The alternative scenario should still see the DXY             finding support at its most previous swing low.
alex.a
3 years ago
exactly it changed the direction ~ although it hasn't reached the target yet but congratulation ~ I have concerned that it has moved too fast perhaps pullback? before to fly away?
Reply
HughGRection
3 years ago
Yeah, I don't really expect it to fly away with no resistance, but the reaction today was exactly what I expected. The FOMC minutes revealed a lot of dissent from voting and non-voting members alike that the taper should be getting under way. That being said, I see clues in the equity and bond markets that this could/should be the start of a trend with continuation for the US Dollar. Bond yields rose nicely today which could help fuel some capital inflows. This snapshot shows an interesting turning point for the S&P 500:
snapshot

Not only is divergence showing up on the RSI again along with the stochastic showing a correction is under way, but the correlation between the SPX and DXY appears to be reverting back to its normal inverse relationship. I highlighted a previous occurrence of this from a couple months ago with similar conditions that had some decent follow through.
Reply
alex.a HughGRection
3 years ago
The side way question, william Rasmussen - the name is very familiar. Hummm - google it ^_^
Reply
Ideas Scripts Chart
United States
United Kingdom
India
España
Italia
Brasil
Россия
Türkiye
日本
한국
Home Stock Screener Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Billing Sign Out