Forex FX: Dollar Index Analysis – USDX – WC 26th November
(Forex-FX-4X.com, US Dollar Technical Outlook, WC 26th Nov)
- Our dollar analysis update last week noted that the price of the USDX was trading just under a key near term technical level, comprised of the following elements:
- previous price structure support lows from June (see far left of the daily time frame chart – fig 1),
- a 50% corrective retrace of 72.69 - 84.1
- the highlighted FE 161.8 extension area.
- we also noted that “the corrective risk is that the the dollar is overbought in the near term”.
- This technical confluence zone has held as resistance and the dollar index is now trading back at the previous range resistance highs from late October, which have provided initial support on the drop lower. This area may see extended support but the daily and weekly timeframe charts have closed near the ultimate low of the respective time periods, with an associated threat of further bearish follow through.
- The price action around 80.00 is now our near-term focus. More specifically, we want to see if price can hold above this area on the daily closing basis, after the strong bearish move on Friday.
- We will also be monitoring the euro/dollar price action for any hint of fading momentum, as the pair managed to move within 10 pips of the 1.3000 psychological level on Friday (see the associated EUR/USD analysis update).
Dollar Analysis – USDX – Weekly Chart (Fig 2)