Hi Traders! US Dollar Index short term forecast update and follow up is here. On June 2nd 2022 I shared this “US 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 H1 chart, we could see that the price which was moving higher has created higher highs based on the MACD indicator, which is a sign of gaining momentum towards the bullish side. Currently, it looks like a pullback is happening with the price creating a bullish hidden divergence that has formed between the first low that has formed at 101.491 and the second low that has formed at 101.965 based on the MACD indicator which we may consider as another evidence of bullish pressure. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence favoring this short term bullish view. So based on all this, until the key support zone shown in the image below (marked in blue) holds my short term view remains bullish here and I expect the price to move higher further.
On the H1 chart, based on the above-mentioned analysis my short-term view was bullish here and I was expecting the price to move higher further after pullbacks until the key support zone holds. After the higher highs, the pullback that I was looking for happened with the price creating a bullish hidden divergence that has formed between the first low that has formed at 101.090 and the second low that has formed at 101.451 based on the MACD indicator, which we may consider as a fact provided by the market supporting the bullish view. Most importantly the price was holding above the key support zone. The price then moved higher further as I expected it to and delivered 400+ pips move to the upside as you can see in the image below.
On the M15 chart, the market provided us with various facts supporting the bullish view. After the higher highs on the H1 chart, the price which was moving lower on the M15 chart created a bullish divergence between the first low that has formed at 101.546 and the second low that has formed at 101.451 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the bullish view. Then as you can see in the image below how the price moved higher after that and provided a wonderful move to the upside.
As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction as per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted to us and took the right action according to that.
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If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Arvinth Akash
Traders Academy Club Team.
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