USD Indx - Dollar has chance to recover. Go long half trade unit
The turn down from daily Kumo top and the bearish move was pretty agressive, fast and straight. Thus USD has quickly become oversold. DXY reached the previous low, which was printed in mid March.
What we have to notice here is that if price can not drop below the 79,30 key support early next week, then the three lows (Oct 2013, March 2014, April 2014) will be able to make a slightly upward support line (I would not call it a trend line yet), and could be considered as higher lows following each other. For now I think there is a good chance for USD to correct higher, so for the 79,30 zone to hold as a cruicial key support.
Ichimoku components are still bearish in general, but we have some signs of a bottom building on the 4 Hrs time frame. It is visible even better in the right panel, through the Heiken Ashi candles., where we had two dojis, which did not have long wicks though, but were followed by three green candles and confirmed as reversals by the MACD and Slow Stoch bullish crosses.
For the USD it is really a matter of life or death, to hold above 79,30. If the key support can hold for at least one more week, then we will see a massive and very bullish move from this possible double bottom, up to ard 81,50.
But in case the price breaks and closes below it decisively, it would bring a very sad future for the USD. To be honest I do not even know where the next support would come into focus then.
However looking at the signals mentionned above, my advise for now is to close or reduce USD shorts at least. What's more, I will also try a counter trend long trade. The risk reward is pretty good with 79,27 stop and 79,85-79,95 tgt, but as I said, this long trade is against the trend, so regarding position sizing I will put on only 0,5 trading unit, and will not size it up until I see it has a chance for reversal and for a new confirmed bullish move, based on the Ichimoku trade setup.
The price action has to be monitored closely. I don't know in advance how strong the rebound will be. I neither know, if we'll see one more bearish attack on USD or not. But I know what to look for besides the general chart setup now. It is one simple thing: in next one or two weeks the relative positions of consecutive highs and lows will be very important on the 4 Hrs charts. It is true for EURUSD too (which is of course the main component of DXY), as there on the daily time frame the space has been getting tighter within the long term bearish wedge too.
What we have to notice here is that if price can not drop below the 79,30 key support early next week, then the three lows (Oct 2013, March 2014, April 2014) will be able to make a slightly upward support line (I would not call it a trend line yet), and could be considered as higher lows following each other. For now I think there is a good chance for USD to correct higher, so for the 79,30 zone to hold as a cruicial key support.
Ichimoku components are still bearish in general, but we have some signs of a bottom building on the 4 Hrs time frame. It is visible even better in the right panel, through the Heiken Ashi candles., where we had two dojis, which did not have long wicks though, but were followed by three green candles and confirmed as reversals by the MACD and Slow Stoch bullish crosses.
For the USD it is really a matter of life or death, to hold above 79,30. If the key support can hold for at least one more week, then we will see a massive and very bullish move from this possible double bottom, up to ard 81,50.
But in case the price breaks and closes below it decisively, it would bring a very sad future for the USD. To be honest I do not even know where the next support would come into focus then.
However looking at the signals mentionned above, my advise for now is to close or reduce USD shorts at least. What's more, I will also try a counter trend long trade. The risk reward is pretty good with 79,27 stop and 79,85-79,95 tgt, but as I said, this long trade is against the trend, so regarding position sizing I will put on only 0,5 trading unit, and will not size it up until I see it has a chance for reversal and for a new confirmed bullish move, based on the Ichimoku trade setup.
The price action has to be monitored closely. I don't know in advance how strong the rebound will be. I neither know, if we'll see one more bearish attack on USD or not. But I know what to look for besides the general chart setup now. It is one simple thing: in next one or two weeks the relative positions of consecutive highs and lows will be very important on the 4 Hrs charts. It is true for EURUSD too (which is of course the main component of DXY), as there on the daily time frame the space has been getting tighter within the long term bearish wedge too.
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