Dollar Index Forecast – USDX Analysis 19th February
- The dollar has risen versus its major currency counterparts despite a late week downside correction; this came after the heavily weighted EUR/USD currency pair rallied almost 200 pips on Thursday along with cable and other majors.
- A correction on the USDX came after price had penetrated the key price pivot level at the 79.70 area; this had confluence with a 38.2% Fibonacci retrace of the swing lower from 13/01/2012.
- A further corrective move lower could potentially be seen as the long upside shadow on Thursdays candle, coming at a confluent technical area, has the look of a swing point. Admittedly this is heavily dependent on developments in the euro-zone area which should have a bearing on any dollar forecast in february and possibly beyond.
- The USDX gave a modest weekly range of 151 pips which is 94% of the 160 pip 26 week average weekly range.
- Potential resistance is seen at the 79.70 price pivot in the first instance with the 80.00 psychological round number and 50% retrace of the last swing lower closely aligned on a failure to hold below 79.70.
- The 78.35 swing low on 9/2/2012 was held by the highly confluent area comprising of 38.2 and 50% retraces of prior moves. This level now has price structure support and we will monitor closely on any further move to this area for support.
Dollar Index (USDX) Daily Chart