In today's fundamental review, I noted that the US dollar and CFD on the US dollar index (displayed as #USDX in the trading terminal) maintained a long-term uptrend. The breakout of yesterday's local high of 105.15 will be a signal for further growth. In this case, #USDX will continue to rise towards its multi-year highs at 121.00 and 129.00.
Alternatively, the breakout of today's local low at 104.59 and short-term support at 104.42 (EMA200 on the 15-minute chart) will be an immediate signal to open short positions. A breakout of the local support at 103.90 (April highs) will confirm it.
However, #USDX is unlikely to go lower today. In case of a decline, the drop will be limited by the support levels of 103.27 (EMA200 on the 1-hour chart) and 102.50 (EMA200 on the 4-hour chart, EMA50 on the daily #USDX chart).
From the fundamental point of view, the US dollar is set to strengthen and so is #USDX. The main reason behind this is the monetary policy of the Fed, the most aggressive among the world's largest central banks.
Please note that volatility in USD and #USDX will increase sharply on Wednesday at 18:00 and 18:30 (GMT). Check out the most important economic events of the week.
Support levels: 104.59, 104.42, 103.90, 103.27, 102.50, 102.05
Resistance levels: 105.00, 105.15, 106.00
Trading Recommendations
#USDX: Sell Stop 104.35. Stop Loss 105.18. Take Profit 103.90, 103.27, 102.50, 102.05Buy Stop 105.18. Stop Loss 104.35. Take Profit 106.00, 107.00, 110.00, 120.00