US Dollar Long Term Technical Implications
Prepared by Jamie Saettele, CMT
I want to present the weekly chart, which does make the case that a major low is forming. The disparity index is plotted below price (disparity index is the difference between the close and 40 day SMA expressed as a %). Since 2004, the USD index has formed lows when the index reaches roughly -6.5% to -7.5%. The recent low of -7.15% falls right within that range. What’s more, the decline from the March 2009 high consists of nearly 2 equal legs and last week’s candle carved out a bullish engulfing pattern. Lows sometimes takes time to form but the evidence is strong that the USD trend is reversing. Resistance in the coming days and weeks comes in at 7525/60 and 7688.
Support/Resistance Index (M,W,D) – 1, 2, 1
Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Monday), technical analysis of currency crosseson Wednesday and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates at the DailyFX Forex Stream. A graduate of Bucknell University, he holds the Chartered Market Technician (CMT) designation from the Market Technician Association. He is the author of Sentiment in the Forex Market. Send requests to receive his reports via email to email@example.com.
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