Key Make or Break Level Here for the US Dollar this Week

May 25, 2015: 1:46 PM CST

Will it or won’t it?

The US Dollar Index faces a breakout – or reversal down – from a key planning level which should set in motion the next swing trade to the next target level.

Let’s see the zone and plan our trades accordingly:

I delved into more detail for our Afraid to Trade Members (Join  us!) this weekend but I wanted to show a quick chart to help you plan the week ahead.

Even if you don’t specifically trade the US Dollar – or FOREX in general – be aware that movements up or down in the US Dollar play a role in the commodity market trades you may be making.

Right now, we have a pullback against a strong 2014 uptrend that touched a critical support level last week.

Buyers boosted the Dollar higher logically off the 50% Fibonacci Level with a Positive Momentum Divergence.

From here, the index reached the $96.00 target level as highlighted and we’ll use it to plan next week’s trades.

Notice the January high along with the falling 50 day EMA overlapping $96.00.

We’ll be BULLISH for a breakout into “Open Air” for a future swing toward $98.00 then perhaps $100.00 to continue the prevailing uptrend.

However, we do note this resistance level and will be NEUTRAL for our trades between $95.00 and $96.00.

Finally we’ll look to play a failure (into resistance) and will be short-term BEARISH under the $95.00 level and especially under $93.00 should sellers work their will on the index with a breakdown from here.

Whatever strategy you’re using, be sure to focus carefully on the current $96.00 pivot and the price movement AWAY FROM this area (from which we’ll build our trades).

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Corey Rosenbloom, CMT
Afraid to Trade.com

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2 Comments

2 Responses to “Key Make or Break Level Here for the US Dollar this Week”

  1. Akmal Says:

    It’s really great to see this because this can definitely help a lot to get decent results, I am trading mostly with dollar only and with this key level in mind, it’s always easier to go with my decision. I am also thankful to my broker OctaFX, it allows me to work easily with their low spread of 0.2 pips and also swap free account facility where I am not losing anything for keeping my trades overnight in case I feel I can get more profits.

  2. Jordon Says:

    I think there is no doubt that these levels are vital part
    of trading, but it is obviously not all that simple or straight forward which
    is why we need to be very careful in how we work out things. I am trading with
    strict money management and that’s all to do with OctaFX broker’s support given
    their lovely 50% bonus on deposit, it is use able, so that’s why I am able to
    work out things fairly easily and that usually helps me to be successful
    without any trouble at all.