Let's see if the price will turn back up above the support

USDX Pierces the 100 SMA but Will it Close Below?

Posted Wednesday, August 22, 2018 by
Skerdian Meta • 1 min read

The USD index has been beginning its head against the resistance level at 95.00-95.50 for a couple of months but it finally broke above the resistance this month. The USDX reached 0.8684 on my platform, but it started reversing back down and now it has broken back below the ex-resistance level, which should have turned into support now, but it didn’t. The daily candlestick broke below the support/resistance level so that is a proper break in my book, but that’s just on the daily chart.

If we switch to the weekly chart, we can see that the resistance has been provided by the 100 SMA (green). It has been also pierced but the weekly candlestick needs three more days to close, so the price might pull back higher and close above the 100 SMA eventually.

The 100 SMA has been pierced but not broken until the end of the week when the weekly candle closes

If this week’s candlestick closes above the 100 SMA, then the break doesn’t count. The chart formation on the weekly timeframe looks pretty bearish though. Last week’s candlestick closed as an upside-down hammer and this week’s candlestick looks bearish too, but it hasn’t closed yet as I said.

The stochastic indicator is overbought and turning down which is another bearish signal. Donald Trump didn’t help matters much for USDX buyers on Monday when he said that he is not happy with FED raising interest rates. He accused Europeans and the Chinese for manipulating their currencies. So, it is not clear how things will evolve for the USDX and the USD from now on but let’s see where the weekly candlestick will close.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies

About the author

Skerdian Meta is our Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
Related Articles
Comments

Leave a Reply

avatar
  Subscribe  
Notify of