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US Dollar Index Analysis

Currencies / US Dollar Apr 08, 2018 - 03:43 PM GMT

By: Austin_Galt

Currencies Pattern – price looks to be in a consolidating the downtrend. Once this consolidation is over, which I believe is imminent, the downtrend should resume and see price crack to new lows.

Bollinger Bands – these bands clearly show the sideways action in play currently. Price looks like it has just turned down failing to reach the upper band. The lower band has already been hit three times during this consolidation phase and the fourth attempt is usually successful at breaking through.


Daily Chart



Fibonacci – the high of this consolidation was right around the 38.2% retracement level which is very weak and keeps the downtrend in a very strong position.

Horizontal line – denotes a previous swing low set in September 2017 at 91.01. This level is now resistance and price was turned back down just below here. This level could also be one area to place stops.

RSI – still in strong territory but a downtrend in general is taking place.

Monthly Chart



Pattern – a downtrend is clearly in play currently although I don’t believe this is a massive bear market. On the contrary, I am looking for price to correct to around the level where price consolidated from 2012 to mid-2014. I personally think price can get down close to the 80 mark. Let’s see. After this correction, I am expecting a massive uptrend to take place which cracks to new highs above the 2017 high. All in good time.

Bollinger Bands – price has left the lower band and the question now is does it make a move back to the middle band or zoom back down to the lower band. I favour the latter with price behaving similarly after the last little correction at the end of 2017.

Fibonacci – price has been finding support at the 50% angle but I doubt this support is strong enough to send it back up to the 38.2% angle. I am targeting the 76.4% angle to bring in the final low.

Moving averages – bearish with the 100 day moving average (red) below the 200 day moving average (black). I expect quite a bit of overshoot below these averages before price turns back up and these averages eventually turn bullish.

RSI – in a very weak position and I believe about to go back into oversold territory.

Summing up – very bearish over the next few months, looking for a 10% drop or thereabouts.

By Austin Galt

www.thevoodooanalyst.com 

Austin Galt has previously worked as a stockbroker and investment banker while studying technical analysis for over two decades. He is also the author of the book White Night: A Colombian Odyssey

Email - info@thevoodooanalyst.com 

My website is www.thevoodooanalyst.com 

© 2018 Copyright  The Voodoo Analyst - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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