Dollar Index Technical Analysis Update 29th April 2012
- The US dollar has broken well below the ascending trend line we have been monitoring over the previous dollar index update posts. USDX price has now hit the bullish engulfing candle low and the previous visit to this area experienced considerable buying interest.
- Price action at this area should help determine the early weeks directional bias for the USDX as a strong bearish down day (Friday) has now hit a potential demand zone.
- The dollar index is not in full flight at present with it hitting only 69% of the average weekly range over the past week. Many of the currency majors are currently at critical areas of support and resistance which could see a resumption of the range trading or perhaps a breakout. The breakout scenario could easily bring additional USD volatility if it plays out.
- Near term potential resistance is seen at the next up sloping trend line around 78.40. Further to this is the 38.2% Fib level (with 50% prior swing confluence) and price structure low zone around 78.00 – 78.29. If this area gives way the dollar index could possibly see additional bearish pressure building over subsequent trading sessions.
Dollar Index Daily Chart 1
Dollar Index Daily Chart 2