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US Dollar Index forecast for the week of October 6, 2014, Technical Analysis

By:
Christopher Lewis
Updated: Aug 24, 2015, 22:00 UTC

The US Dollar Index initially tried to fall slightly during the session on the week, but as you can see ended up the spiking in going well above the 86

US Dollar Index forecast for the week of October 6, 2014, Technical Analysis

The US Dollar Index initially tried to fall slightly during the session on the week, but as you can see ended up the spiking in going well above the 86 handle. Part of this was due to the nonfarm payroll numbers coming out stronger than anticipated, and the fact that the US dollar is essentially the only currency that people are willing to buy and hold onto at this point in time. However, the market is parabolic by any measure whatsoever, and with that it’s very likely that the market will find quite a bit of support below.

We see the 85 level as being very supportive, as it was once massive resistance. With that, the market should find buyers in that region on a pullback. Quite frankly, it is difficult to start buying in this area right now, simply because it is far too strong. That being said, we are simply waiting at this point in time. If you are not involved in the US Dollar Index at this point, you are simply going to be chasing the trade at this point in time as the market has moved so far.

Although we recognize that the market could go higher from here, we simply feel that it is far too strong at this point in time to risk trying to buy it had the potential highs. The 84 level below is also supportive, and as a result we think that as long as the market pulls back and find some type of supportive candle, we could be buyers.

We have no scenario in which we would sell this marketplace, simply because it is far too strong at this point in time. Because of that, we are bullish only, but recognize that it’s a matter of timing at this point. We think that ultimately this market should go to the 90 handle or so, and the fact that we had such a strong candle for the week, we do believe that the buyers will continue to take over this marketplace.

 

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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