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Writer's pictureLester Davids

U.S. DOLLAR INDEX Short Term Overbought



Overall Trend:

  • 7-Day Trend: Strong

  • 14-Day Trend: Very Bullish


Short-Term Price Action Reading (1 to 10 Trading Days):

  • Do Not Enter Long Here: The risk-reward is considered unattractive at this point.


Medium-Term Price Action Reading (2 to 4 Weeks):

  • Aggressive Buying but Overbought: The index is showing aggressive buying, but it is also overbought.

  • Expect Consolidation or Minor Retracement: Due to the overbought condition, a period of consolidation or a minor retracement is anticipated.   


Long-Term Price Action Reading (5 to 8 Weeks):

  • Aggressive Buying, But Do Not Chase: The trend remains bullish, but it's advised not to chase the price.

  • Look for Overshoot or Failure to Hold Prior Session Range Highs to Short-Sell Back to the 8-EMA:  To identify potential short-selling opportunities, traders should look for instances where the price overshoots or fails to hold the previous session's range highs.


Key Takeaways:

  • The U.S. Dollar Index is currently in a strong bullish trend, both in the short and medium term.   

  • However, the overbought condition suggests a potential consolidation or minor retracement in the near future.   

  • Traders are advised to exercise caution and avoid chasing the price at this time.

  • Short-selling opportunities may arise if the price overshoots or fails to hold previous session highs.




Lester Davids

Analyst: Unum Capital


Note Added on 03 January 2025 at 12h20

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