US Dollar Falls to Key Target Make or Break Support Price July 31
If you’ve been following the US Dollar Index, you may have been surprised with how rapidly price collapsed from the 100 level toward the current major support target of 92.
We’ve been expecting and trading this development in the membership, though it’s occurred much faster than expected, yet here we are at our longer-term price target.
What is it and what’s the quick plan from here? Let’s take a look.
With the exception of a FAILED BREAKOUT and BULL TRAP above the 100 level, the Dollar remained within a multi-year sideways trading range or rectangle price pattern between 92.00 (where we are now) and the 100 level (where we were only a few months ago).
Price traveled the bearish pathway in a single swing without any stable retracement along the way (compare the prior two bearish pathways in early 2015 and 2016).
We have THREE factors at a confluence support level:
- The 50% Fibonacci Retracement
- The rising 200 week Simple Moving Average (red)
- and of course The Prior Price Support/Reversal Level
As traders, we never know what will happen but instead plan dominant (expected) and alternate (unexpected) theses and then build our trades from there (often playing the departure from a key price level).
We’ll label the dominant thesis as a “Support Bounce” play up away from 92 to play back toward 94.50 and higher and thus hold out for the alternate “Bearish Breakdown” play on a trigger-break beneath 92.00 (targeting 90.00).
Get your trades and plans ready for what happens next!
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Corey Rosenbloom, CMT
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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”