2017-AUG-06 USD Index Weekly Outlook.

Please note, that this article comes from my archive. Check the actual date in the header.

Have you seen that tweet from Trump right after the NFP report on Friday? Funny guy he is. I really miss his first tweets after the elections. It was a whole trading strategy. Simple as a piece of wood. Just follow Trump in Tweeter and sell the asset he talks about. That times are gone together with his uncertainty about US Dollar direction. Remember, he was not sure about the line of behaviour in the scope of world reserve currency? Seems like he made a decision couple of months ago, when the USD downtrend started. I bet it is going to continue. Why? It is just a part of the competition line. He thinks himself as a Chairman of Corporation named United States of America. Who are his competitors and partners? It’s very easy to answer this question by watching how he deals with Chinese officials for example. European Union’s “enthusiasm” about Trump can tell a lot. His silent “yes” to Japanese currency manipulation and his use of the same weapon at the same time. Do you want me to continue this list?

I agree with him in one thing: the impact of his actions is strong. Not in the speed of US economic growth, which has a lot more time to react for any changes. But for the currency wars he continues to manage. What would be the long-term result? Only the Time will tell. There is a proverb, I like: “A blind man said: we’ll see”. Here is a link for those who want to laugh more:

Let us have a look at the technicals. We’ll try to analyse USDX from the technical scope of view, using several timeframes. Weekly one to kick off.https://invst.ly/4qa3a

Tips to watch:

• Closing weekly rate 93.42, which is above lowest weekly close in April 2016 (93.05) and above lowest weekly close in May 2015 (93.18).
• The index bounced back up after touching 200-weeks Simple Moving Average.
• RSI is up from extreme levels last week, but still shows oversold ranges
• MACD has a slight potential bullish divergence, but lines are far from intention to cross each other

I like to draw median lines like that red one. It gives me a lot information about price action. You see, it worked well several times. My point is that we need to see a clear breach above this line to make a conclusion that uptrend is renewed bulls power. As long as prices are below the red median, I bet mostly on northwards. But this fact does not exclude attempt for deeper retracements up to 96.50. And of course, we’ll consider such high levels as a gift from the market to renew mid-term short of the greenback index. All of these scenarios should come together with fundamentals. Next big test - US Inflation reports.

Daily: https://invst.ly/4qa7b

Ichimoku is far signs of reversal. But we’re above first trend resistance. The retracement could try to test the second one, which is around 94.32 now. RSI will have approximately same levels for its’ 50% value. So we will be looking for these ranges to renew shorts of the greenback. Hourly and H4 bollinger bands have same bullish signals: several closings above the higher line. It would not make any big difference whether they will try to come back to the middle BB line before showing new local highs, or will they go just straight up.

Conclusion. The index is going north early next week. It’s too early to open new shorts, we’ll see better prices to jump in. We would recommend to hold longs for those traders who have already reversed and became bulls for dollar index.

Please note, that this article comes from my archive. Check the actual date in the header.
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