DXY has managed to broke the trend line yesterday with strong bullish candle and reached 93.50 level and currently DXY is in consolidation phase.93.67 and the .50 Fibonacci will act as decent resistance for the bull. If this levels are broken then we may expect DXY will reach 94.75 level
DXY is on edge of the support at 96. RSI has formed positive divergence but yet not turned up. Circle marks the perfect support which should be touched by 23-26th July, if it has to work. The overall frame of the trend is still pointing 94 but positive divergence can't be ruled out. Better to be on the sideline and see which support is in motion. If it comes to 94...
The daily chart of the dollar index has formed a Full Elliot Wave.
It is due for a correctio n in the form of ABC Wave.
Also there is a possible double top pattern forming in the counter.
The pair has also formed a evening sta r pattern in the candlestick.
So as per the above analysis,we can expect a strong a downside in the Dollar index.
The 4 hour chart of DXY shows sideways movements and double top pattern
With engulfing candle formed selling pressure intensifies further more here after
Short until reaching the expected targets respectively.
The daily chart of Dollar index has formed a cup and handle pattern.
Although, it’s a continuation pattern many analysts now use it to predict a trend reversal also.
It has also formed a handle by taking a retracement of 25%.
As per our analysis, we expect a major bullish move in the counter if the index can sustain above the value of 95.03 .
On the contrary,if...
Supports proved to be quite determined in producing a strong recovery. However the rally now has tread into median line resistance and this could now hold back further strengthening next week and push the DX into a range until 94.30 is surpassed.
Just to put in a prospective, following traditional technical analysis can lead to good trades and necessarily no need to trade every other day. It is question to be asked if fundamental make the technical or fundamental can be predicted by the technical. Nevertheless it is always to good to have both technical and fundamental knowledge in your trading arsenal.
