US Dollar Index Forecast October 21, 2014, Technical Analysis

The US Dollar Index of course had a slightly negative session on Monday, but as you can see we are still sitting above the $84.50 level. That being the case, it looks like the 84 level below is also supportive, so we are simply waiting for some type of supportive candle in order to start buying this overly bullish market. We have no interest whatsoever in selling this market, because the US dollar is without a doubt in the favored currency by Forex traders around the world. On top of that, the EUR/USD pair continues to look like it’s likely to fall, so that should of course have the opposite effect on this contract as well as it is without a doubt the most influential factor in this contract.

On top of that, the Federal Reserve is getting out of the quantitative easing game, and because of that it should continue to push up the value the US dollar overall. On top of that, the USD/JPY pair being looks like it’s ready to go much higher as well, which of course is the second largest factor in this marketplace.

All things being able, we believe that this market will then head to the 90 handle, and we have no intentions whatsoever on selling this market as the 84 level looks supportive, and even if we broke below there, the 83 level is also supportive. On top of that, the precious metals markets are giving mixed signals, which of course is also a sign of how the US dollar might do.

There are a lot of concerns when it comes to global economies anyway, and as there seems to be quite a bit of fear out there, we believe that this market will of course get a bit just because of the “safety aspect” of it. Ultimately, we think that the 90 level will be massive and its implications, but it does appear that we will head towards that area fairly soon based upon recent action. The trend is up, and there is nothing on this chart that makes us think it’s about to change.