Sunday, August 6, 2017

USD US Dollar Index Weekly Chart

The drama continues with the US dollar index and euro. The currency baskets move inversely to each other so the euro pops when the dollar drops and the dollar is popping when the euro is dropping. The trend this year is clearly dollar down and euro up. A lower euro benefits European stock indexes. The 200-week moving averages are playing a key role as highlighted in the previous charts.

The euro punched up through its 200-wk MA at 1.1789 and ran to 1.1909 before retreating back below the 200-wk to 1.1774. The first attempt to poke up through failed. As would be expected, at the same time, the US dollar drops to test its 200-week MA support at 92.36 and bounces strongly. The positive divergence on the daily chart was previously highlighted. USD has also violated its lower standard deviation band so a move back to the middle band at 97.31, and dropping fast, is in play.

The 2-1/2 year sideways channel at 93-101 or 92-101 if you prefer remains in play and price is deciding if it will collapse under the bottom trend line, or not. An important confluence exists with the 200-week MA, horizontal price support, and the lower band violation. The direction of the dollar from this area is very important.

The daily chart's possie d and ovesold RSI and stoch's create the pop in price. The 20-day MA is at 94.06 and should be kissed. The weekly chart above shows an oversold RSI and stochastics agreeable to a bounce in the weekly time frame, also positive divergence with the indicators sans the MACD. That MACD line hints that price may come back down again after a few days or week or so of recovery but overall, the set up is agreeable to the USD moving sideways and hanging on to the lower part of that channel on the weekly basis.

The intraweek spike low candlestick last week is similar to two others over the last couple years which bounced price sideways for a month or so then higher (purple lines). The monthly chart favors more weakness ahead further out on the monthly basis. Probably a lot of sideways choppy slop ahead and perhaps a bias lower as the end of the year approaches. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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