Daily View - Dollar Index, 21 Oct 2013

--> Trend, Momentum, and S/R Levels

Trend: Down since Sep 2013.
Mode: Cyclic, but one Cycle Indicator has indicated beginning of down trending prices which has to be confirmed by a daily major cycle.
Review of previous Analysis:

Trading recommendation – Not triggered
S/R Levels – Market was flat
Direction View - Market was flat

Cycle Analysis: Daily major cycle is now trending down and upside is very difficult and more downside probabilities are very high. A minor cycle has reached near its bottom and prices can bounce today along with it. Prices can see 82 only if they cross major hurdles of 80.17 - 80.45 - 80.9. Below 79.7, DX can drop to 79 as immediate level.
• Sell Signal: Since cycles are on downside and down trending has been confirmed, so more downside may be expected. Sell signals may take few days as short term cycle is may rise from bottom.
• Buy Signal: Pullback can be expected today.
Conventional Technical Analysis:

Bearish setups –
1. Price is below 38.2% retracement of 80.9
2. Price is below the last support of the speed resistance lines
3. Price failed to close above peak of 80.69 (point ‘a’ closing price) at its next peak of point ‘c’.
Bullish setups –
1. The momentum indicator (bottom panel), had given a clear re-accumulation buy signal at bottom point ‘b’, where the indicator had a higher bottom compared to its previous bottom. The re-accumulation is shown by green rising arrow in indicator panel and blue declining arrow in price plot. But there are also indications that the effect of this bullish signal is already over.
Though there are more bearish indications, but since a minor cycle is at bottom that can cause a bounce, caution should be adopted in trading. If price remains below 80.17, then expect more downside to 79. Avoid long positions.

Key S/R Levels:
• Resistance Levels: 80.18 - 80.45– 80.9– 81 – 81.2 – 82 – 82.8
• Support Levels: 79 – 78.5 - 77
Risk: Price may continue to rise if it strongly crosses above its first resistance level against its downtrend.
Recommendation: More indications are for a downside, especially if prices remain below 80.17. Sell on rise near 80 with SL 80.2 and targets 79.6/79.