Dollar trend reversal according to plan

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December 6, 2017
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December 6, 2017

Good day to all, I have been bullish the Dollar since last week after our target of 92.50 was reached at the Dollar index. From November 22 and earlier (read free daily analysis here) I was expecting the Dollar index to make its final leg down towards 92.50-93 and then reverse. Price reached our target area and reversed off the 61.8% Fibonacci retracement. Since then price is moving higher. Trend change has not been confirmed yet. Price is bouncing, but big resistance levels are ahead.

Here is today’s analysis. I expect the Dollar index to move higher over the next few weeks. Important resistance is at 93.80.

The major component of the Dollar index is the EURUSD. The Dollar index broke below the Ichimoku cloud support yesterday and I believe that at least a move towards 1.17 is to be expected.

Price has broken below the red rectangle support area and the Ichimoku cloud. Price back tested the broken support and got rejected. I remain bearish EURUSD. A break below 1.17 will open the way for a move towards 1.14-1.15.

USDJPY is also an important component of the Dollar index. Here the key level is at 111.50.

Price has broken out of the 4 hour Kumo and has back tested the cloud support. Price could move lower towards 111.75 but it is not necessary. I expect the USDJPY to move back upwards towards 113. If resistance is broken at 113.15 I expect to see it fast towards 116

Last week’s lows in USDJPY and the Dollar index are very important support levels. Dollar bulls must hold above them. EURUSD highs of last week are the most important resistance level. As long as we are below them I will favor selling EURUSD.

 

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Thank you for taking the time to catch up on my thinking.

Alexandros Yfantis
Alexandros Yfantis

Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.