Dollar Index: Weekly Price Action & Technical Analysis as on 24-JUL-2016

The Dollar Index made a quite surprising move during the passing week closing strongly above the Weekly 50 SMA, penetrating the Weekly upper Bollinger Band and closing above it.

In the previous reviews I mentioned the Quarterly bullish pinbar over the sloping 8 EMA, in which a HH above should indicate a false thrust down on the big range since March 2015.

DX - Q - 24-JUL-2016

Currently it is “the moment of truth” as for the midterm direction. Continuing strongly above 97.8 or making a shallow correction followed by a Weekly Higher High eventually (=a Follow Through) should indicate by most chances that the Dollar Index is midterm bullish or by most chances should stay at the upper part of the range (96 – 100), hence the Elliot Wave count suggested in the previous reviews is invalid.

If the current price action is a manipulation of smart distribution, it should be seen right ahead this coming week by opening the Weekly bar with a gap down and closing it weak, or by making a Weekly bearish engulfing pattern whereas the room for a topping price action above the Weekly high is very narrow (not higher than 97.8).

Drilling down into the Daily timeframe, taking out the Thursday’s Low at 96.765, followed by a daily correction up that doesn’t take out the Weekly Swing High, then a follow through down (sketched) can be a good indication that the whole price action of last week was a manipulation, and is a good level to build a midterm short position.

Otherwise, any correction down that is followed eventually by a Weekly HH is very bullish and the price is most likely heading towards the 98.6 level area, above the next Weekly LHBL.

Dollar Index: Daily chart (at the courtesy of prorealtime.com)

Dollar Index: Daily chart (at the courtesy of prorealtime.com)

 

Disclaimer: Anyone who takes action by this article does it at his own risk and understanding, and the writer won’t have any liability for any damages caused by this action.

 

Gil Ecker

[email protected]

Market Analyst and trader

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