US Dollar Technical Analysis ? Trying to Find a Lifeline

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Talking Points:

  • US Dollar Technical Strategy: Holding Long via Mirror Trader Basket **
  • Support: 10375, 10354, 10302
  • Resistance:10405, 10419, 10431

The Dow Jones FXCM US Dollar Index is attempting to launch a recovery after putting in a Bullish Engulfing candlestick pattern above double bottom support set from October 2013. A daily close above resistance at 10405, the intersection of the 23.6% Fibonacci retracement and a recently broken trend line set from July 2011, exposes a falling channel top at 10419. This is followed by the 38.2% retracement at 10431. Alternatively, a break below the outer layer of double bottom support at 10354 exposes the 61.8% Fib expansion at 10302.

This week’s trend line break is an ominous sign for our bullish long-term US Dollar outlook but waiting for confirmation on a breach of the double bottom seems prudent before calling the reversal. We remain long via theMirror Trader US Dollar currency basket for the time being.

US Dollar Technical Analysis  Trying to Find a Lifeline

Daily Chart – Created Using FXCM Marketscope 2.0

** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

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