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US DOLLAR INDEX CAN MAKE AN ALL TIME NEW LOW 62 - 65 BY 2024-2025

US DOLLAR INDEX CAN MAKE AN ALL TIME NEW LOW 62 - 65 BY 2024-2025

US DOLLAR INDEX AT RISKY ZONE, RISK REWARDS DON'T FAVOUR ANY FURTHER BULLISHNESS {CMP 102.22}


As per daily chart formation index has given first negative reversal after making immediate high of 103.81 levels where multiple tops witnessed supply between 103.55 to 103.80.

Daily chart structure showing A B C pattern breakdown with breakdown level around 102.25.as far as prices trades below this level we will see supply pressure to continue  in coming period also.

As per A B C pattern index has achieved its immediate target level of 101.25 with negative RSI indicator which will create more supply to further downside level well below 100 and up to 99.70.

On weekly charts index has given a breakout by crossing its previous resistance around 100.55 levels and now reversed from its immediate multiple tops around 103.80 as per daily charts.

Weekly structure shows that index can take support of previous supply levels around 100.55.as far as index holds this level firmly we can again see level of 102.25-103.60 on weekly basis.

 index will show further weakness only below immediate support level of 100.55 by giving decisive breakdown /weekly close.
Any decisive breakdown /weekly close  below 99 will put further pressure on index as already momentum indicator  RSI is on a negative divergence side which will also restrict limited upside for index in coming period too.

In addition to another weekly chart we saw that index has retraced almost 0.618% (approx 101.60 levels) in last 14 years and now trading with huge weekly negative divergence which will restrict index to rise further.

Long term weekly chart is also trading with lower top and lower bottom formation which itself says that this rally from the level of 70.81 is corrective rally which will fizzle out very soon.

As per monthly chart, index has given breakout by giving monthly close above previous immediate highest closing of 100.21 with huge negative divergence.

We need to close below 99 levels on monthly chart to confirm the big monthly downward reversal.


CONCLUSION:-

Hourly & daily chart indicates profit taking, distribution, supply  which also suggests a terminal of current rise with an overlap move  with negative divergence near recent highs at 103.81.

Bulls seen as trapped by the supply, as weekly charts suggest a completion of 5 waves from the lower end with negative close and overbought RSI.

The monthly trend suggest an early indication of completion of this rally , if in case even there is a further rally upside it needs to correct first & upsides capped at 104/109.

The long term patterns is lower tops & lower bottoms formation , thus simple dow theory suggest a new lower low going ahead.

The previous Bull run was from sub 88 levels in 1978, up to sub 165 in Feb 1985, this was a 7 year bull cycle. The counter trend bear rally made a new low of sub 78 in 1992 in next 7 years, again we had corrective rally to sub 120 levels till July 2001 with 8 year  cycle. After that again we had bearish cycle from sub 120 levels to new low of  sub 70 levels till 2008( 7 years of  bearish cycle) now at the current junction, we are struggling with 61.8 Retracements, of the last bearish fall and we have almost to complete 9 years of this bull cycle.

Though there is a potential upside, but time cycles and very near, short and medium term outlook suggest that bulls are tired and upsides capped between 104/109 and downside opens up for a potential levels of 62.5 to 65 in next bearish cycle, thus hinting risks rewards for bulls looks unfavorable with current price levels and lows of current bear cycle to be printed by 2024 (approx 8 years cycle). 

 Many will be surprised, is it possible??? The answer is yes everything is possible and perishable , if the pound can crash on Brexit, Dollar index can also crash with some event going ahead in united states like Texit,Calexit. ( Texas Exit & California Exit)


US 10 YEAR BOND YIELD


As per historical data prices is having a range of 3.20 and 1.32, (3.20 was in 2013 and 1.32 was in 2016,3 years range) given the last correction bounce up to 78.6 percent as per Fibonacci the value is 2.80 ,in coming period we see 3.20 is major level for trend reversal. Any monthly close above this level will change  the trend or else the long-term set up is down only with lower top lower bottoms formation, and we may not be surprised to see a further new low in bond yield prices in the coming 7 year cycle of 0.85.



     


US DOLLAR INDEX HOURLY, DAILY, WEEKLY, MONTHLY CHART



US DOLLAR INDEX MONTHLY CHART CYCLES & US 10 YEAR BOND YIELD CHART

(Detail analysis by Charan More,Deepak Bhoj, Avinash Karle,Nilesh Dedhia and Team NTD )


(Date : January 07,2017)

























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