FX.co ★ USDX: Daily analysis for May 29, 2013

Daily chart: The USDX continues to forming a lower high pattern below the resistance level of 84.29. Yesterday it was a bullish session for this market due to the holiday that was last Monday and this produced many buy orders on the USDX, supported by the fact that there were positive news for the U.S. economy. Now the USDX tries to break this resistance and if it succeeds, it would be expected to rise to the level at 85.18. On the other hand, it may be a rebound in this resistance and can fall back to support at 83.74 level. The MACD indicator is in extreme overbought, so we might expect consolidation movements in the market for today's session.

H4 chart: The USDX broke a bullish trend line near the 84.00 psychological level. Now the USDX proceeds to ascend to the resistance at the 84.47 level. This chart clearly indicates the formation of a lower high pattern, to look up to that resistance. The USDX remains above the 200-day moving average and technically, I do not expect this market to fall this week, unless economic data in the U.S. are negative. If market USDX breaks the resistance level at 84.47, it is expected to rise to the level of 84.80. The MACD indicator is in positive territory and still shows strength in the upward trend of the moment in this market.

H1 chart: Near the level of support in 84.03, a Point of Control (POC) is formed. It is indicating that the support is very strong and it will be very difficult for the USDX to make a breakout there. Now the USDX is forming a lower high pattern below the level of resistance in the 84.37, if this level breaks, it is expected to rise to the level at 84.70. However, there is the possibility that the USDX breaks the support at 84.03 level and if it does, it could fall to the support at the 83.73 level, where the 200-day moving average is located. The MACD indicator is in extreme overbought, so we must be careful to do intraday trading in the USDX market.

Fundamental Outlook: For today's session, major economic data releases in the U.S. and in the UK are not expected.



Trading recommendations for today: Based on the daily chart, place buy (long) orders only if the USDX market breaks with a bullish candlestick, the resistance level is at 84.29, take profit is at 85.60, and stop loss is at 83.95.