I don’t need much of an indicator to know that the market is poised waiting for direction.
The DXY has passed a 7.5 weighted alpha and just hit the 97.00 resistance zone.
If you trade the USD crosses you might want to think about getting some Stop orders on, then kick back and wait. Last time we had this even setup it took about 14 days for the price action to drop out of a very narrow channel.
To sum it all up, forex traders use the USDX as a key indicator for the direction of the USD. Always keep in mind the position of the USD in the pair you are trading. For example, if the USDX is strengthening and rising, and you are trading EUR/USD, a strong USD will show a downtrend on the EUR/USD chart.
Please, where can I get this indicator?
Wow, perfect insightful question, this reflects my mind like a mirror, because I was also thinking the same thing. But then I realized one thing that you shouldn’t forget which is that the USDX is a combination of five other currencies apart from the EUR.
So even though EUR singularly tends to affect the index more than the others, the importance of the other currencies in determining the relative strength of the USD, cannot be undermined.
