FX.co ★ USDX Daily analysis for May 27 2013

Daily chart: Last week, the USDX tried to break the strong resistance at the level of 84.22, but it was unsuccessful. Now, the USDX is below the support at the 83.74 level and it may be able to fall to the support level at 83.22 in the coming hours. However, these movements being made by the USDX, could indicate that a lower high pattern is forming, and then to break the resistance at the 84.22 level, where we could place buy orders in this market, above that resistance. The USDX remains above the 200-day moving average, which supports our bullish outlook in the long term. The MACD indicator is in extreme overbought, therefore, we must be cautious when making swing trading the USDX market. If the support at the level of 83.22 is broken, it is expected to fall to the support level at 81.74 in the medium term.

H4 chart: This market has found strong support at the 83.49 level and gradually, it is approaching the 200-day moving average. There is the possibility that it may fall to the support level at 83.39, which could coincide with the 200-day moving average in the coming hours and make a bullish rebound, to try to break the resistance at the 84.47 level. If it does break that resistance, it is expected to rise to the level at 84.80. The MACD indicator is showing extreme oversold, which could indicate that the USDX conduct a bullish market rebound in the coming sessions.

H1 Chart: For the price it is now, the USDX is forming a Point of Control (POC) and is trying to break the support at the 83.52 level. It is very possible that the POC and support in 83.52, causing a strong rebound in the USDX bullish and try to break the resistance levels at 83.73, 84.03, 84.18 and 84.37. In the range between 83.73 and 83.52, I do not recommend doing trading, because it is an area of high market volatility and the USDX makes irregular movements within that range. Furthermore, if the market USDX breaks the support at the level of 83.52, would be expected to drop to the level of 83.27. MACD indicator is negative territory but closer to the neutral territory, which could indicate indecision intraday trend for this market.

Fundamental Outlook: For today's session, we expect slow movements in the USDX market, because the UK has the Spring Bank Holiday and the United States, the Memorial Day.

Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the USDX market breaks with a bullish candlestick, the resistance level is at 83.73, take profit is at 84.03, and stop loss is at 83.52. Place sell (short) orders only if the USDX market breaks with a bearish candlestick, the support level is at 83.52, take profit is at 83.27, and stop loss is at 83.73.