- USDOLLAR breaks key trendline
- Broader topping pattern taking shape?
Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.
The FXCM US Dollar Index is looking vulnerable. Last week the index broke out from a clear triangle pattern on the daily charts to a record a new multi-year high. This advance was short-lived, however, and the USD has come under steady pressure over the past few days. Key support was broken yesterday as the trendline connecting the December-February lows gave way. This level had proven to be reliable support over the past few weeks and the break under it is a clear change in behavior that warns attitudes towards the Greenback have shifted. Further weakness under the late March lows around 11,900 would trigger a broader reversal pattern that sets the stage for a more meaningful correction against the primary trend. Traction above 12,050 is needed to alleviate immediate downside pressure and re-focus attention higher.
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FXCM US Dollar Index Daily Chart: April 17, 2015
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risk in the Week Ahead:
LEVELS TO WATCH
Resistance: 12,015 (Trendline), 12,050 (Gann)
Support: 11,886 (March low), 11,830 (Fibonacci)
Strategy: Sell USDOLLAR
Entry: Sell USDOLLAR at 11,975
Stop: Daily close above 12,050
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail firstname.lastname@example.org. Follow me on Twitter at@KKerrFX.