June 20, 2013 in USD
The FEDs Done it Again – Just Look at the Chart of US Dollar Index
They’ve spooked the market yet again resulting in a buy up of US Dollars and dumping of Gold and Silver. Here’s the 5H Chart of US Dollar Index. The US Dollar Index finally broke out of the trend channel that was looking bearish. The break out is strong but it would need to be backed by a follow through buying. The DOW and S&P 500 also got spooked and tanked. This points to the likelihood of the FED coming out to allay the fear and calm the markets. Will they succeed? Will the markets absorb the news in a calm manner and will that stop the big moves that is happening? That remains to be seen.
Looking at the Chart of US Dollar Index, it is showing a clear breakout. The MACD is also pointing up supporting further price surge.The MACD is near the zero level and if it breaks above that level, it would be the first indication of further upside to come.
Here’s the Daily Chart of US Dollar Index where it displays the parallel trend channel (in blue) that we have proposed last week. The trend channel broke to the downside which was a bearish situation. It has since closed back into the trend channel. Breaking out of a trend channel and closing back into it is a bullish move. It has also surge back above the 81.30 strong support zone. These two developments are pointing to further upside for the US Dollar Index.
At this moment, there is only one price bar and that is not enough make a conclusive confirmation of a bullish move for the US Dollar Index. It would be wise to wait for at least another one or two price bars before making a bullish confirmation. We caught a High Probability, Low Risk Setup for the US Dollar Index earlier on 09 May 2013 and a similar move may be on the cards.