FX.co ★ USDX: Daily analysis for May 22, 2013

Daily chart: The USDX is forming a lower high pattern below the resistance level at 84.22 and above the support level at 83.22. There is the possibility that the USDX will fall to the support level of 83.22, but it can make a bullish rebound there, to continue forming the bullish pattern and break the resistance at the 84.22 level. If the USDX breaks that resistance, is expected to rise to the level of 85.18. On the other hand, if the USDX breaks at the level of support 83.22, is expected to fall sharply to the level of 81.74, which houses the SMA 200. The MACD indicator is in positive territory but showing signs of overbought on the USDX.

H4 chart: The USDX is in a congested area, due to the large amount of trend lines doing resistance above it. However, the bullish outlook remains alive in the USDX, because the current price is above the 200-day moving average. Our hypothesis is that if the USDX manages to break the bullish trendline drawn near the 84.70 level, it is expected to rise to the level of 86.00 in the medium term. We must be careful with the MACD indicator, because it remains in negative territory, although it is very normal due to the correction of the trend that has been making the USDX in recent sessions and we can see some signs of oversold levels on this market, which could boost the USDX bullish strength.

H1 chart: On this chart, we can see some interesting patterns that could help us understand better the situation of the USDX intraday market. A Point of Control (POC) is weak at 84.15 offering resistance level and below the current price of the USDX, the moving average is 200 and there it is quite possibly the buy orders will increase to give a bullish momentum to this market because the 200 SMA will be serving as dynamic support, invalidating the formation of the higher low pattern on this chart. If the economic news today in the United States is positive and Ben Bernanke's speech will be optimistic, this bullish rebound in 200 SMA could be given and the USDX could exceed 84.15, where the Point of Control (POC) is placed and providing resistance above this market. The MACD indicator is showing signs of oversold.

Fundamental Outlook: For today's session at 14:00 GMT in the United States, the Existing Home Sales (Previous: 4.92M / Forecast: 4.99M) will be published and Fed Chairman's Ben Bernanke will testify in the U.S. Congress, an event that could generate high volatility in USDX market. Also, if the current reading in the Existing Home sales is higher than the forecast, the USDX could do bullish movements during the hour.



Trading recommendations for today: Based on the daily chart, place BUY orders (long) only if the USDX market breaks with a bullish candlestick, the resistance level is at 84.22, take profit is at 85.18, and stop loss is at 83.22.