Hi Traders! Dollar Index short term forecast update and follow up is here. On April 5th 2022 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
On the H4 chart, based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward moving market conditions so it basically reflects a bullish environment. Also, the price which was moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as another evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a flat correction is happening in the form of a range. This range is formed by the highs and lows reaching parallel support and resistance zones. The price which is moving inside this range has reached the bottom of this range, respected it, and bounced higher from this zone. Currently the price is nearing the top of this range. In addition to this, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. Also, there are no signs of trend change at the moment. Until the bottom of the range holds my short term view remains bullish here. A valid breakout above the top of the range would be the validation for this short term bullish view, we may then expect the price to move higher further.
In Dollar Index based on the above-mentioned analysis, my short term view was bullish and I was expecting the price to move higher further. Also, I mentioned that “If we get a valid breakout above the top of the range we may then consider it as a validation for this short term bullish view and may expect the price to move higher further”. The validation for the short term bullish view which is a valid breakout above the top of the range happened here as per the plan. We then had a pullback and then the price moved higher further delivering 100+ pips move so far.
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Arvinth Akash
Traders Academy Club Team
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