WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

Today’s Trading Edge: Dollar Index (DXC) – A Choppy Rally to Continue

Posted by Edward Moya on May 23, 2014 9:03:00 AM


The Dollar Index (DXC) began a strong rally two weeks ago after hitting a major support zone around the 79.00 handle and potentially forming a double bottom along with the 2013 October low.  The trend line break to the upside sets bullish momentum in motion.  With a holiday weekend upon, we will look to see if the U.S. dollar can  maintain the NY highs going into the close.    

The daily chart shown above highlights a potential run towards the 200-day Simple Moving Average (SMA) which is currently trading at 80.50.  With liquidity about to leave for the weekend, price may not have enough buyers hanging around to provide one last significant thrust.  A potential bearish ABCD pattern is also forming at 80.70.  If we see price respect that technical level, a pullback will allow us an opportunity to look for a long entry.    

If bearish momentum triggers a daily close below 80.26, a stronger correction may target the 50-day SMA at 79.95.  Major resistance will come from 2014 high of 81.52. 

The trade: Buy Dollar Index at 80.27 with a stop loss at 79.97 and a take profit at 81.47.  The Risk/Reward Ratio is 1:4. 

Edward J. Moya

Technical Strategist

WorldWideMarkets Online Trading


Tools & Educational Resources

Forex 101LEARN MORE >>
Learn the basics of Forex and how to practice trading the markets.

GlossaryLEARN MORE >>
Confused by the language? Click here and search for key trading terms.

Browse our frequently asked questions and find your answers right away.

Access to the educational lessons, webinars and platform walkthroughs.


Get started with a FREE $10,000 Demo Account and experience the Forex Market RISK FREE!