US Dollar in a Box

By | November 19, 2014

The US Dollar Index (USD) has moved back up to the highs of 2009 and 2010, and the trade around the question of whether it breaks to new highs or pulls back from this level, may be determined by the borders of the small channel on the daily chart of the PowerShares US Dollar Index Bullish Fund (UUP).

19. weekly $US chart

19. uup  chart

A large dark candle formed on the daily UUP chart at the end of last week which tested the $23.44 resistance level and support at the $23.22 level, the upper and lower boundaries of the consolidation. Moving Average Convergence/Divergence has been in bearish divergence to price since the October high and is making a bearish crossover, and the Money Flow Index has moved below the 21 period average of the indicator, that I use as a signal line. The 200 day moving average is rising to meet the October gap and that would be the first area of support, in the case of a breakdown.

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