Dips to be bought as USD Index hits channel top
USD Index – Strong upward momentum has resulted in the USD index reaching the top of the daily corrective channel formation. This week’s outlook is to buy on dips with ample scope, if not a mild bias, for some selling pressure today in the dollar.
Prime support levels are:
1. 96.49. This is a reverse trend line support and or bespoke level
2. 95.95. This is weekly support and close to the Marabuzo level of 95.98
A daily close above last week’s highs and the next target is the channel top at 100.78. We have no exhaustion/correction counts or bearish reversal pattern so look for dips to be bought.
USD Index Channel Top
Source: Saxo Bank. Create your own charts with SaxoTrader click here to learn more
1. Weekly chart highlights an Ending Wedge formation but with ample scope for a good move to the upside.
2. Daily chart is inside the Ichimoku Cloud. Stalled at the cloud top on Friday but, with a bullish Outside Day noted, dips should be bought.
3. Four-hour chart highlights a revers Head and Shoulders breakout with a measured move at 1.3269. The stalling overnight can be seen as a pause at the 161.8% extension level of 1.3181 (from 1.2832-1.3047).
The only negative outlook for this view is the expanding wedge pattern that is possible on the 2-hour chart. However, there is ample scope for a move to the upside with the trend of higher highs not seen until 1.3344.
USDCAD - Head and Shoulders Target
USDCAD - Ending Wedge
USDCAD - Monthly Outlook
Management and risk description
A move to 1.3215 and we look to move stop to entry (61.8% pullback of the 1.3457-1.2832 move).
Entry: Long at 1.3170 (1 unit). Buy at dip at 1.3127 (1 unit).
Target: 1.3265 (1 unit) and 1.3390 (1 unit)
Time horizon: this week
— Edited by Clare MacCarthy
Non-independent investment research disclaimer applies. Read more