USDIndex: USD Strength Pushing to New Multi-Year-Highs Amid Pullback in Global Equity Indices
The daily candle chart below shows the medium term price history for the USDIndex - which is a contract for difference (CFD) that aims to track the underlying US Dollar index (DXY). Today the index is trading near 99.38 around time of publication - and just off session highs of 99.63.
Last Wednesday when USDIndex was reviewed in Ideas You Can Trade, the upside target of 95.75 had been reached and a sustained break above that price was explained as very bullish.
Since then, USDIndex has continued a sustained surge where it is very close to 100.00 today and nearing the next Fibonacci retracement line of 61.8% as can be seen on the chart below (coinciding near 101.70).
The continued USD strength is persisting as global equities have pulled-back in recent days, as well as the sell-off in happening in Gold. For the USDIndex - While a pullback from current levels could precede a higher-high - the trend is still fiercely bullish.
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 99.98 with a Limit to take profit @ 100.45 and a stop-loss @ 99.61 Risk/Reward Summary: Limit risk = 47 points profit / (-37) Stop-loss risk = Gain to Loss ratio = 1.27
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 98.32 with a Limit to take profit @ 97.69 and a stop-loss @ 98.92 Risk/Reward Summary: Limit risk = 63 points profit /(-60) Stop-loss risk = Gain to Loss Ratio = 1.05
Medium Term Daily Candle Chart:
Longer-Term Weekly Chart: