U.S dollar index long-term technical analysis

In August global political situation take a turn to worse after tariff war between U.S and China continue. The situation spread fear across the global market. Moreover, bond yield experienced inversion which means the market is close to recession.

When this article was written, both U.S and China soften and looking to revive the trade talk. The market also expects stimulus will be announced especially when the global economy deteriorates.

New Month

Monthly chart

The path of U.S dollar index pointed upward and no change to the outlook yet. The index bounced from 50% Fibonacci retracement level in the previous month and currently attempting to extend the gain. Without any major change in the trend, U.S dollar index should extend gain toward 99.40 – 100.00 area.

Weekly chart

On the weekly chart, now we have a bullish channel where the index moves inside. Recently, the index tested 97.50 support level and manage to bounce from the support level. If the index could breakout above 98.25 then we could expect it to continue upward and test the top of the channel.

Daily chart

The outlook on the daily chart is similar to the outlook on the weekly chart. The index slowly moves upward after the bounce from 97.50 support level and currently testing 98.25 resistance. At the current time, traders will wait for reaction near the resistance.

Trade plan (For U.S dollar pair)

The overall trend of U.S dollar index is bullish but it is currently testing 98.25 resistance level. Waiting for further reaction near the resistance level is the best options traders could take. When a pullback happens, traders could enter long positions in U.S dollar. Another long positions to consider is when the index breakout above 98.25 and retrace toward it.