Wednesday, May 18, 2011

USDx Dollar Index

Here goes my view on the buck:

Long term: It seems that price is into a wedge consolidation formation. A divergence on the monthly chart points to a reversal that could be met as soon as the second semester of 2012 (although predicting time is VERY hard). The minimum target for this reversal is @ 92.63.

Mid term: A supportive trendline could be broken today. This would lead to falls as indicated by divergences observed on the H4 and the H1 time frames. H4 initial target points to the 74.40 level (H4) and than to the 73.93 (H1) level.


Short term: Proximity to the top of the range, with about 4% of the AMR (average monthly range) left to go, with less than half of the month gone, suggests that price had a greater probability of expanding north. However, price was close and indeed took out the previous low of the week, thus suggesting further extension south probably for the remainder of this week (24%  of the average weekly rangestill to go). Most probably the mid-term target will be reached sooner than later before prices return to its appreciation mode.






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