26 Feb 2020
The US Dollar Index is an index of the value of the United States dollar relative to a basket of foreign currencies, often referred to as a basket of U.S. trade partners’ currencies. This index is highly correlated with US dollar Forex cross pairs since it’s the reference for the US dollar strength versus strongest world currencies.
US Dollar Index forecast 2020
When we look at the US Dollar Index DXY weekly timeframe, we can see a very strong weekly demand imbalance created around $97.88. That weekly imbalance at #1 is the strongest impulse for months. See DXY screenshot below.
Supply and demand trading strategy
As supply and demand traders trading a supply and demand trading strategy, we should be looking to trade this kind of imbalances. This is a long term supply and demand trading analysis based on the weekly timeframe, you can use this analysis to trade intraday or even scalp the Dollar Index DXY. I am just pointing out the importance and strength of the weekly demand imbalance around $97 where long term longs will be possible again.
Will price retrace at that weekly demand level? We don’t know, but if it does and the scenario is still valid, we should be looking to go long. Will that imbalance play out nicely? We don’t know, the odds are high but imbalances are also broken. Make sure you know what to do at those imbalances, trade your trading plan and focus on high probability imbalances in a clear trend. If you do that, you will be right more often than not, and that’s what we need. Being right more often than not with a nice return on every winning trade will have you on the right side of the equity curve all the time. Just be patient and focus on the clear setups.
Related Post
© 2013 – 2022
Set and Forget S.L
All Rights Reserved.
Follow Us
Disclaimer
Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information. By viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Set and Forget, its employees, or fellow members. Futures, options, and spot currency and stocks trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Forex and futures markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell spot Forex, cfd's, stocks or other financial products. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
High Risk Warning: Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in Forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results.