KTM FX Daily: USDX continues to eye a key medium-term support level.

Is this the place to buy USDX?

After traced out a double top pattern at 103.80 in march 2020, the dollar index fully reversed the pandemic gains and continues to trade lower. So far, the index retraced more than 13%, and only 2% needed to fully complete the full reverse. of 2018-2020 rally. Including the 2020 fall, there were 11 periods the dollar index (KTM: USDX) logged the fall with a magnitude between 15-34%.

As shown in the above chart, there have been eleven periods of broad, continued USD weakness since 1986. As per the available historical data, the first retracement was 16% between August -December 1987, and the biggest fall of the dollar was recorded in  July 2001 and ended in December 2004.

Current trend: Following the colossal rejection of 103.80, we are now finally entering the major support zone. The series of tops in March 2009 and June 2010 and low in February 2018 should now become support and so if you are bullish USD into 1Q 2021 then this is the place to take a close look.

USDX may be running to an area of support defined the following:

• The previous top spread between 89.70-88.60.
• The recent swing low find at 88.00.
• The 200MA Monthly located at 87 which coincides with the 50.0 Fibonacci retracements of the March 2008-March 2020 high.
• Positive 14-day RSI divergence.

If you are the bullish dollar, there are the charts to focus on: Models like USD against JPY, SGD, and ZAR.

USDZAR: On Thursday finally, the trend has reversed as rising numbers of COVID daily infections in South Africa.

USDSGD: The cross-tested and held interesting support here at 1.3150-1.3000 it’s 61.8 fib. Breaking below the zone would increase of continuing down towards 1.2500.

USDJPY: The area to watch in USDJPY is 100-99.50. The area includes the 50.0 fibs. So all in, a fairly thick congestion area.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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