A technical view of the Dollar Index for the week ahead. Both Dollar Bulls and Dollar Bears have their monthly target clearly set with price coming down off MM3 and forming the lower high early last week in the bearish Dollar trend and the potential double bottom at MM2 which setup late last week. Note that until price has made a higher high the trend on the Dollar is bearish. Fundamentally we expect Dollar weakness to continue though still need to pay attention to market conditions to confirm that the market agrees with our bias. The nice thing about this week is the confluence of WM3 and MPP – a clear line in the sand for Dollar bears. The below analysis provides both a bullish and bearish view with this week’s new pivots taken into account.

Coming up next S&P500.

Dollar Index Daily

Bears sold at MM3 and in the fib zone at the start of last week. giving bears a target of MM1. Bulls bought at MM2 at the end of the week giving bulls a target of MM4.

Dollar Index H4 Bears

Price will be opening at the H4 21/ WPP and 11600 - all resistance. We have a bullish H4 stoch which needs to complete its cycle to overbought. H1 is currently overbought so we expect price to move lower from resistance though when H1 oversold and H4 bullish, bulls might very well take their shot at WM2. Bears will be looking for a break of this support though if price does come up from WM2 and break WPP then the next level of resistance is WM3/ MPP confluence. This is a significant price for bears that sold at MM3 because it locks in the monthly bearish target of MM1 and sees price heading down to WM1/ WS2 this week and MM1 by the end of Feb.

Dollar Index H4 Bulls

With H1 overbought and price opening at resistance bulls expect price to move down to support and will look for their entry at WM2. Bulls will look for a break of WPP and expect price to come down off WM3/ MPP confluence while eyeing support at WPP and with a target of WM4. A break above WM3/ MPP locks in the monthly target of MM4 with MPP being future support as price heads up to MM4 by end Feb.

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