by Nick Simpson, Forex-FX-4X
(USDX Technical Update – 27 May 2013 – Forex-FX-4X.com)
- The USDX is trading in a near 100-pip range after the break above prior 84.10 area resistance has seen an element of hesitation to push higher from the dollar bulls.
- The daily timeframe chart below shows how the dollar index has recently seen extended consolidation periods followed by a “range breakout” higher into a new trading zone.
- We note that the previous “box range” high is aligned with the 38.2% Fibonacci retrace around 83.40.
- Price has however already tested demand just above this 83.40 confluence area, with the move to around 83.50 on Wednesday and Friday this past week. This aligned with the EURUSD pair testing the psychological 1.3000 handle and failing to break above this area.
- The recent range resistance high around 84.60 is a near term technical point of interest as is the 85.00 round number area.
- The key EURUSD pair has been capped around the aforementioned 1.3000 round number handle during trading last week. A clean break above this point could potentially see the dollar index break back into the 81.45 – 83.40 box range.
Click to enlarge