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CFD: Ideas You Can Trade- USDIndex Edges Higher Near 2009 Peak

Posted by Steven Hatzakis on Nov 7, 2014 4:28:00 AM

USDIndex: Resistance Near 5 year High Under 88.70 May be Next Upside Target and Barrier

The daily candle chart below shows the medium term price history the USDIndex contract for difference (CFD) which aims to track the underlying US Dollar index, and is trading today near 88.14 (around time of publication).

Last time the USDIndex was reviewed in the Ideas You Can Trade series, the multi-year resistance line (point 1 in red on daily chart below) was described as a level where a breakout or reversal could occur.

Since then the index broke-out to the upside of that line and has since been very bullish and is pushing towards the 2009 high near 88.70, and reached an intra-day high near 88.27 in today's session (barely 40 points from that 5-year high).

With further upside likely, the next target may be that 2009 peak where resistance may exist, and where a break above 88.70 could help propel the USDIndex even higher, or where a failure to break above 88.70 could cause a pullback.

Below are examples of how to trade a bullish continuation or a bearish reversal:

1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 88.31 with a Limit to take profit @ 88.59 and a stop-loss @ 88.04 Risk/Reward Summary: Limit risk = +28 points profit / (-27) Stop-loss risk = Gain to Loss ratio = 1.03

2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 87.97 with a Limit to take profit @ 87.67 and a stop-loss @ 88.26 Risk/Reward Summary: Limit risk = +30 points profit /(-29) Stop-loss risk = Gain to Loss Ratio = 1.03

Medium Term Daily Candle Chart: 

USDIndexDailynovember 7 2014 note

Longer Term Weekly Candle Chart:

USDIndexWeekly nov 7 2014 note LONG TERM



Topics: forex trading, US Dollar, DXY, United States Dollar, US, USDIndex, USD Index, DXC, contract for difference, technical analysis, USD, $, USDX, cfd, indices, index


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