26.09.201308:59 Forex Analysis & Reviews: USDX: Daily analysis for September 26, 2013

Daily chart: The USDX found strong resistance at the 80.62 level, and it is now very likely to drop to the level of 80.11. Recall that if the USDX manages to break that level, it will be expected to fall to the level of 79.19 in the medium term. Furthermore, there is still the possibility that the USDX breaks the resistance level of 80.62, although this is unlikely because the USDX continues forming a higher low pattern (bearish pattern). The MACD indicator remains in negative territory and the USDX continues to trade below the 200-day moving average.

H4 chart: The USDX re-entered within the range between 80.50 and 80.06 levels. We should be alert to the possible development of a bearish trend in this pair, because this could continue forming a higher low pattern and continue falling. It should be noted that if the USDX manages to break the support at the 80.06 level, the decline could extend to the level of 79.00. The MACD indicator is in extreme overbought area.

H1 chart: The USDX find support at the level of 80.35 and it is very likely that this resistance rises to the level of 80.59. However, the bearish outlook remains alive, because the USDX could be forming a higher low pattern and finally break the support at the 80.35 level. If successful, it is expected to fall to the level of 80.15 and the bearish trend could be reinforced by the rest of the week. The MACD indicator remains in positive territory, so we should be cautious.

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USDX Index breaks a bearish candlestick; the support level is at 80.35, take profit is at 80.15, and stop loss is at 80.54.