Hi Traders! Dollar Index short term forecast update and follow up is here. On July 21st I shared this “Dollar Index Short Term Forecast And Technical Analysis” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
Looking at the H1 chart, we could see that the price which is moving higher has created multiple false breaks with bearish divergence between the first high that has formed at 93.027 and the second high that has formed at 93.174 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, based on the Volumes indicator we could see that the volumes are dropping here as well, we may consider this as yet another evidence of bearish pressure. So everything looks good here for the bears, if the price moves lower and if we get a valid breakout below the low at 92.932 we may then consider it as a validation for the bearish view and may expect the price to move lower further in the short term.
Dollar Index H1(1 Hour) Chart Current Scenario
On the H1 chart, the price action followed my analysis and moved lower as per the plan. The validation for the bearish view which is a valid breakout below the low at 92.932 happened as I expected it to. The price then provided a short move to the downside towards the bottom of the range. We then had a pullback with the price creating a bearish hidden divergence between the first high that has formed at 93.174 and the second high that has formed at 92.908 followed by a bearish continuing divergence based on the MACD indicator. The price then moved lower and broke below the most recent uptrend line. We may consider these as facts provided by the market supporting the bearish view. The price then moved lower further and delivered an excellent move to the downside!
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
So traders when it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This Dollar Index short term forecast is a perfect example of this scenario.
For similar trade ideas and much more I invite you to
Also, you can get one of our strategies free of charge. You will find all the details here
If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
