The Market Structure of US Dollar Index, Should We Panic Now?
The recent US interest rate hike and an “unexpected” dovish statement given by the ECB during the EU interest rate decision last week provided further bullish momentum for the DXY. However, no key levels are actually broken at the moment and DXY is still moving well within the yearly channel between the level of 89~90 and 102.50~104. DXY is currently in a clear uptrend, which is demonstrated by clear breakouts with impulse movements, followed by consolidation periods for a month or two.
I am currently only looking to buy the DXY, at the area of 99.40-99.70 after a pullback. The price is currently in the impluse stage after it has broken the previous bullish flag, making a new high. This makes the uptrend still valid. However, I will hold my buy orders if the price has touched the area of interest (yearly resistance level) of 102.50~104.00 first before a pull back has occurred. I believe that a rebound from the yearly resistance level could trigger a sharp price drop which could lead to a potential trend reversal. DXY is the very definition of "The Trend is Your Friend".
I am currently only looking to buy the DXY, at the area of 99.40-99.70 after a pullback. The price is currently in the impluse stage after it has broken the previous bullish flag, making a new high. This makes the uptrend still valid. However, I will hold my buy orders if the price has touched the area of interest (yearly resistance level) of 102.50~104.00 first before a pull back has occurred. I believe that a rebound from the yearly resistance level could trigger a sharp price drop which could lead to a potential trend reversal. DXY is the very definition of "The Trend is Your Friend".
Comment:
US Dollar Index futures has retraced as expected from the previous high at 101 level. Now, the price is on its way to test the previous resistance level of 99.50 area. DXY has not yet touched the area of interest (102.50~104.00). Therefore, we are still looking to buy the pull back. We are closely monitoring the price action and will look for a consolidation/reversal pattern and a breakout. Then, we will continue to enter buy positions to follow the uptrend.