$USDollar Bearish Tones @ 10,450 5/14/2014
D1 Chart
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H4 Chart
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The USDollar may be under further downside pressure as the index trades under a key Daily trendline established earlier this year. The USD now rests under a swap level @ 10,500, where prior technical support is holding as present resistance. This level was tested on NFP Friday, with a massive PinBar reversal that extended nearly 50 points. This should be communicating the underlying intentions of the major market players when price trades near this zone.
Clearly, we’ve seen the establishment of a solid downtrend with consecutive lower highs and lower lows, with the swing high created over the last 36 hours or so shaping up to be the potential top of another leg down (i.e a lower low on the D1).
Intraday there are clear signals for a ceiling in place under 10,475, as a nice topping pattern has carved out with 3 hours left in NY session before the 9AM candle prints. Momentum is presently diverging as well, as buying strength has clearly diminished with indications of a lack of will to retest 10,500. Sellers may attempt to re-attack 10,400, but they’ll need to clear 10,430 first. If buyers are attempting to turn this ship around, we’ll need to see 10,500 get taken out with conviction. Bullish targets would then be set @ 10,570 with 10,600 extended.