U.S dollar index Long Term Technical Analysis September 2019

U.S dollar index long-term technical analysis

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Trade war issue keeps intensifying between U.S and China at the end of the previous week. It fueled upward movement in the U.S dollar index. However, both parties have agreed to meet again in October and restart the trade negotiation. Current global equity market slowly recovers as China exempted U.S products from tariff this September and U.S delay tariff implement from 1st October to 15th October.

On the economic ground, inversion of bond yield scared the market and it will become the major issue to answer for the Fed. This month FOMC meeting expected to deliver rate cut of 25 bps and schedule further rate-cut in the future.

New Month

Monthly chart

No change to the bullish traction of U.S dollar index. The index is moving inside the bullish channel and it reached 99.40 resistance this month. We might see further upside in the index. However, the current situation will depend on the Fed decision on the interest rate. Judging from the overall technical direction, we might have a bearish correction toward the bottom of the channel.

Weekly chart

Similar to the outlook in the monthly chart. U.S dollar index will continue its movement inside the bullish channel. Traders are waiting for the Fed interest-rate decision to determine the overall direction. If the index moves lower then traders could consider long positions in U.S dollar when it hit the bottom of the channel.

Daily chart

There is not much clue on the index next direction on the daily chart. The price slowly contracts with a lower high and higher low. 98.25 might become the middle point for the next momentum movement.

Trade plan (For U.S dollar pair)

No clear direction yet for the index at the moment. Traders and investors are waiting for the final decision by the Fed this week. After the FOMC meeting, we will get a better view of the long-term direction. Aside from the Fed, next month traders will prepare for trade negotiation between U.S and China.

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