US Dollar and GOLD Technical Analysis

Talking Points:

• Support: 10474-95, 104434 (channel top)
• Resistance:10589-619

The Dow Jones FXCM US Dollar Index looks poised to continue higher having set a critical double bottom at 10375, the October 2013 floor. An upward trend change signaled by a break above resistance at the top of a falling channel set from January saw follow-through with a break of resistance in the 10474-95 area. The bulls now aim to challenge the 10589-619 region, with a move above that opening the door for an advance to year-to-date highs. Alternatively, a reversal back below 10474 eyes channel top support-turned-resistance at 10434.




--- Written by Ilya Spivak, Currency Strategist for DailyFX.com




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Talking Points:

• Support: 10474-95, 104414 (channel top)
• Resistance:10531 (May 28 high), 10589-619

The Dow Jones FXCM US Dollar Index recovered following a brief correction lower from two-month highs. Positioning has favored the upside after prices set a double bottom and broke the down trend from January. Near-term resistance is at 10531, the May 28 high. A move above that aims for the 10589-619 region. Support is in the 10474-95 area, with a reversal below that opening the door for a retest of the channel top at 10414.



--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


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Talking Points:

• Support: 10430 (trend line), 10375 (double bottom)
• Resistance:10474-95, 10531 (May 28 high)

Dropping beneath resistance-turned-support in the 10474-95 area has opened the door for a test of a trend-defining rising trend line set from July 2011 (now at 10430). A break below this threshold on a daily closing basis exposes a double bottom at 10375. Alternatively, a turn above 10495 clears the way for another challenge of 10531, the May 28 high.



--- Written by Ilya Spivak, Currency Strategist for DailyFX.com



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Range bound strategies have proven to be some of the best trading techniques for currency pairs like the USDCHF over the past few weeks, especially during the Asia session. DailyFX research has also found that trading during the Asia session using a range bound strategy on European currencies has been one of the most profitable approaches.

It is also important to note that volatility in the currency market is at multi-year lows, meaning that previously strong-moving pairs have materially slowed. To keep the odds shifted towards a favorable balance, traders may consider adjusting to these conditions by moving from breakout and trending strategies over to a consolidation or range-bound approach.




For newer traders it can take countless hours to accurately judgeprevailing market conditions. Moreover, it also takes time to perform effective analytics, like deciding which indicator to use and how to identify the strongest levels of support and resistance. Fortunately, FXCM has designed applications to streamline this process.

These levels can be best utilized in a ranging market by buying at support and selling at resistance. To help establish when the best time to trade is, FXCM created the Trading Sessions application, which highlights Asia market hours (as seen in the grey areas on the chart below).

When trading around these levels, it is also important to note critical event risk. Major changes in monetary policy expectations can cause market volatility, pushing prices through technical barriers as asset valuations realign to policy expectations.

USDCHF, 1-hour chart



The strategy works as follows:
On 6/11/14 USDCHF was trading just below the R1 resistance level at 0.9005 (top left of chart) during the Asia session. The pair continued to trade in a narrow range until 6/12/14 when price action met resistance at R1 again and then proceeded to move down to 0.8964, where support was found on 6/13/14 (as reference by the white dashed line). The move was roughly 40 pips.

From 6/13/14 to 6/16/14 the price shot up from support at 0.8964 on a near-90 degree trajectory back to R1 where it traded around for several hours leading into the Asia session on 6/16/14. That was another 40 pip move.
On 6/16/14 the USDCHF traded back down to 0.08964, where it held once again on 6/17/14. As the market continued to oscillate, it seemed reasonable to suspect another move up to 0.9005, which played out as advertised today.

The strategy of buying at support and selling at resistance would continue until prices break and hold above R1 or below 0.8964. If the market breaks below 0.8964, the next level of support would be set at 0.8945, or S1.

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Talking Points:

• Support: 10409, 10375, 10323
• Resistance:10474-95, 10531, 10589

The Dow Jones FXCM US Dollar Index continues to find itself in a precarious position as prices test multi-year trend support set from July 2011. This barrier (now at 10417) is reinforced by a falling channel bottom at 10409. A daily close below that would suggest a major reversal is in progress and initially expose double bottom support at 10375, followed by the June 2012 high at 10323.Resistance remains in the 10474-95 area, with a move above that clearing the way for another challenge of the May 28 high at 10531.




--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


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Daily



-The USDOLLAR has broken long term trendline support and is just ticks from the October 2013 low at 10354. A drop below that level faces the 2012 high at 10323. Exceeding 10420 is needed in order to break the near term downtrend.


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Daily



-The USDOLLAR has broken…and reclaimed...long term trendline support. The advance through 10420 is a great start to suggesting that the trendline was break was of the false variety. A weekly key reversal is in the works too (need to close above 10409).

LEVELS: 10,250; 10,323; 10,354 | 10,395; 10,420; 10,452

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Talking Points:

• Support: 10426, 10392, 10354-75
• Resistance:10442-56, 10513, 10560

The Dow Jones FXCM US Dollar Index is struggling to build upward having reversed higher as expected after producing a Bullish Engulfing candle pattern. Buyers are testing resistance in the 10442-56 area, marked by the July 3 high and the 23.6% Fibonacci retracement. A break above that on a daily closing basis exposes the 38.2% level at 10513. Alternatively, a below rising trend line support at 10426 targets the July 9 low at 10392, followed by a triple bottom in the 10354-75 area.



--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


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Talking Points:

• Support: 10430, 10392, 10354-75
• Resistance:10456, 10513, 10560

The Dow Jones FXCM US Dollar Index rebounded as expected after putting in a Bullish Engulfing candle pattern at support set from October 2013. A daily close above the 23.6% Fibonacci retracement at 10456 initially exposes the 38.2% level at 10513. Alternatively, reversal below rising trend line support set from the July 1 low at 10430 opens the door for a test of the July 9 low at 10392, followed by a triple bottom in the 10354-75 area.




--- Written by Ilya Spivak, Currency Strategist for DailyFX.com



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Talking Points:

• Support: 10481, 10456, 10375
• Resistance:10513, 10560, 10606

The Dow Jones FXCM US Dollar Index broke above yet another layer of resistance after reversing upward as expected having put in a Bullish Engulfing candle pattern. Near-term resistance is at 10513, the 38.2% Fibonacci retracement. A daily close above that exposes 50% level at 10560. Alternatively, a turn back below horizontal pivot support at 10481 opens clears the way for a test of 10456, the intersection of the 23.6% Fib and a rising trend line set from the July 1 low.

Daily ---

Written by Ilya Spivak, Currency Strategist for DailyFX.com



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