learn to trade forex

Dollar Index and how to trade it profitably

Learn To Trade Forex

I really hope all is well with you and you are ready to learn to trade forex. Last night we had the FOMC meeting and federal funds rate decision. There was no rate increase as expected but an indication that we are getting close. The statement was leaning towards the hawkish side and was reflected in the charts with the Dollar strengthening across the board.

The main points were and I quote “The labour market continued to improve, with solid job gains and declining unemployment,”. It said that “underutilisation of labour resources has diminished,” dropping the previous word of “somewhat” to describe the change. These little word changes are significant as they are clues for the potential next rate increase and the direction of the Dollar.

Above is a chart which shows you exactly what is going on with the dollar index. The one thing that I have learnt over the last 15 years of trading forex is that in the summer period. Which is the last week of July and first couple of weeks in August, we see false breakouts. Hence it is very critical that we chart pairs with accuracy and proficiency.

FOR DOLLAR BULLS:

We will wait for the daily price to close back inside our triangle and then focus on a daily close above 96.70. I understand this is close but it is what it is. If you would like an even more confirmed long then wait for a close above 98.50 and you can target 100.00 and above.

FOR DOLLAR BEARS:

Due to the current period, we have to wait for a major break of support and this currently sits at 95.80.Once we close below here then we have a huge run to 93.25.

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