Daily View - Dollar Index, 23 Oct 2013

Trend, Momentum, and S/R Levels

Trend: Down since Sep 2013.
Mode: Trending down.

Review of previous Analysis:

Trading recommendation – Price was near selling level
S/R Levels – Price made a high near R and a low near S
Direction View - Correct

Cycle Analysis: Daily major cycle is now trending down and upside is very difficult and more downside probabilities are very high. As repeatedly mentioned that "below 79.7, DX can drop to 79 as immediate level", DX crashed during end of the day from above 79.85 to below 79.3. Pullback was expected since last two days, that may take place today though it may not be a strong one.
• 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 on rise from bottom.
• Buy Signal: Pullback can be expected today.

Conventional Technical Analysis:

Bearish setups –
1. Price made a new low on 17th Oct indicating trend is still down
2. Price is below the last support of the speed resistance lines

Bullish setups –
1. None.

Price is now near expected immediate support level. Though price is clearly in trending down mode, downward crash immediately today is not expected. Wait for an upward movement for a selling opportunity. Avoid long positions.

Key S/R Levels:
• Resistance Levels: 79.85 - 80 - 80.45– 80.9– 81 – 81.2 – 82 – 82.8
• Support Levels: 79 – 78.5 - 77

Risk: Price may rise quickly if it strongly crosses above 80 against its downtrend.

Recommendation: If sold near 79.85, book profit near CMP 79.22. More indications are for a downside, especially if prices remain below 80. Sell on rise near 79.85 with SL 80 and target 79.