Daily View - Dollar Index, 30 Oct 2013

Trend, Momentum, and S/R Levels

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

Review of previous Analysis:

Trading recommendation – Price did not reach selling level
S/R Levels – S level was correct at 79, price moving up near R at 80-80.2
Direction View - Correct

Much expected pullback took place yesterday and prices moved as expected.

Cycle Analysis: Daily major cycle is trending down and upside is very difficult and more downside probabilities are very high. Pullback may continue today as short term cycles are rising.
• Sell Signal: Since cycles are on downside and down trending has been confirmed, so more downside may be expected. A clear sell signals may take 1-2 days as short term cycles have yet to peak.
• Buy Signal: Buying is risky in a trending down market, even if short term cycles may cause a rise in price.

Conventional Technical Analysis:

Bearish setups –
1. Price made a new low on 25th Oct indicating trend is still down
2. Price is below the last support of the speed resistance lines
3. Price is below 30 DMA
4. Price is moving in a downward channel and is yet to come out of it

Bullish setups –
1. Price is near support of 79.
2. Momentum is rising
3. Price has crossed above 7 DMA indicating short term rise
4. Price is near 38.2% level and if it crosses above, price may reach 80-80.2

Price is pulling back and may rise to near 80-80.2 on crossing above 79.77. Strong resistance is indicated at 80-80.2 range and all the bullish factors may take price up to this level only beyond which it is difficult for price to rise.

Key S/R Levels:
• Resistance Levels: 79.77 - 80.2 - 80.45 – 81
• Support Levels: 79 – 78.5 - 77

Risk: Price may rise quickly to near 80.2 against its downtrend.

Recommendation: Sell on rise near 80 and hold for 79.77/79.5. Avoid long positions.