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26.03.201403:15 Forex Analysis & Reviews: Technical analysis of USDX for March 26, 2014

Long-term review

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The data released on Tuesday showed U.S. Consumer confidence touching a six-year high in March and house prices rising in January. The majority of the FOMC members expect the first rate hike in 2015, which is a bullish note. The US Dollar Index has made a Double Bottom near 79 and reversed up. With Positive Divergence on RSI, the US Dollar Index has broken out of the short-term Falling Wedge. With this, the Correction in Wave 2 or X seems to have completed. Further breakout above 81 will be indicated to move towards 85 and perhaps 90 and above in the months to come.

In the daily chart, the US Dollar is facing strong resistance level at 80.34 (50SMA). If the price crosses the 50SMA level, it will fly up to 80.73 and 81.32 in the near term. On the down side, the level of 79.77 (50SMA) is acting as strong support, below it 79.27-79 is the major support.

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