Sold the US Dollar with a breakout pullback entry after the 10610 support was broken.
Target 10560, stop-loss at 10631.
Risk factors:
- the rising S/T trendline is still intact
- the downside breakout didn't have a solid follow through
The Dollar Index trades rangebound above the 10610 level which shows a confluence with the rising trend channel from the Nov.24 low. I prefer the upside with a bounce from here but the overhead resistance at 10650 (check the daily chart) needs to break up for further gains.
A break of the 10610 support has scope for 10540 with an interim support near 10580 (0.618...
Bouncing back to the 10647 resistance after a 0.50 fibo retracement, the Dollar Index showed a bearish pin bar on the weekly chart. The S/T reversal to the downside has failed at the first attempt and the index now challenging the 10647 resistance level again.
As we can see in this chart the dollar lost some ground thanks to yellen's dovishness and disappointing data, but to be fair I don't think UK or the EUROZONE had amazing data neither, the EURO is under pressure and the pound had already priced in a possible hike in interest rates in 2015, I think even if slowly the dollar will gain some strength but for the short...
The USDX is approaching major trendline resistance on the Daily chart and a breakout could pave the way for a test of the 11000 level, which is the 2013 high. MACD has recently posted a positive signal and technicals seem supportive overall.
