The March U.S. dollar index (DX H9) on the Inter Continental Exchange (ICE) Friday closed lower, nearer the session low, at a bearish weekly low close and hit a fresh seven-week low. Serious near-term chart damage occurred last week as prices saw a bearish downside “breakout” from a sideways trading range at higher price levels.
The next downside price objective for the bears is to produce a close below solid technical support at 82.00. The U.S. dollar Index Bulls’ next upside price objective is to close prices above solid technical resistance at 87.00
Important for all traders is the fact that the U.S. dollar index is one of three major “outside markets” that have been and will continue to influence most other markets, with the other two being crude oil and the U.S. stock market. Traders should continue to monitor these three markets very closely. This is a classic example of the value of “Intermarket” analysis. Intermarket analysis is the study of how markets are inter-related and impact each other’s daily price moves.
The VantagePoint Intermarket Analysis trading tool (www.TraderTech.com) also suggests more downside price pressure for the March U.S. dollar index. VantagePoint is a valuable trading tool that employs “Intermarket” analysis to forecast near-term price trends.
See on the VantagePoint daily bar chart for the March dollar index that the Predicted Medium Term Crossover study shows the blue predicted 4 day exponential moving average is below the actual black 10 day simple moving average close, which is a bearish signal.
The Predicted Medium Term Crossover is the predicted 4 day exponential moving average of typical prices two days ahead (P4EMA+2) crosses above or below the actual 10 day simple moving average close (A10SMA).
Also see on the daily chart for the March U.S. dollar index that VantagePoint’s Predicted Neural Index (PIndex) is presently reading 0.00, suggesting still more downside price pressure in the near term. When the predicted simple three-day moving average value of typical prices is greater than today’s actual three-day moving average value, the Predicted Neural Index is “1.00,” indicating that the market is expected to move higher over the next two days. When the predicted simple three-day moving average value of typical prices is less than today’s actual three-day moving average value, the Predicted Neural Index is “0.00,” indicating the market is expected to move lower over the next two days. The PIndex is a proprietary indicator that predicts whether or not a three-day simple moving average of the typical price will be higher or lower two days in the future than it is today. The Predicted Neural Index compares two three-day moving averages to one another – today’s actual three-day moving average with a predicted three-day moving average.
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