The graph above shows the 2013 annual support and resistance levels for US$ index, namely DXY. According to the analysis of the year 2013, 83.50 was a major resistance level. So, there are no monthly closes above that level.
Currently, we are in 81.50 resistance zone and the continuous envelope has been squeezing since 2012. The squeeze indicates a burst. What is the direction of the burst, is the million dolar question. By this writing, I will try to find an answer for the question.
The graphic below presents annual support and resistance levels for US$ indice. As it is clear from the graphic, prices are a little bit higher than resistance level at 81.00. Target resistance in order is 83.50 level. As of August 13, DXY is 81.61. The price difference between resistance levels is paving the way for a 400 pips drop for EUR/USD.
Meanwhile the squeezing envelope signals that US$ indice will rise up to 89.50 level and EURUSD will drop by 1600 pips.
Since we are in 3rd Quarter and enough data has been collected for the annual bar. Assuming that current data is correct and annual bar will be completed as of today. Then, we can forecast price levels for the 2015 annual bar of DXY.
82.50-83.40 zone becomes more important for the next year. Any close, above 83.50 level will push the prices higher. If prices will go higher, then support should and must be more stronger. Are they stronger ? Yes, support levels are stronger than resistances and aligning DXY slowly for an annual up trend.
What I have written here is the result of a kind of technical analysis. Which fundamental reasons will be delivered and broadcasted is out of my interest.
Before concluding my writing, let me check Quarterly analysis for US$ indices. There are 2 yellow dotted lines on the graphic below. Those levels are around 80.60 and 82.80. Break of 80.60 level points out that indice will try to rise to 82.80 level.
my last analysis for US$ indices is monthly analysis for August 2014. Targets are 82.10 and 83.10 with initial support around 81.25 level.
Before finishing my writing, let us have a look at EUR/USD monthly analysis for August 2014. Trend is running downward and major resistance level is 1.3440. Targets for the month are 1.3270, 1.3230 and 1.3100 levels.Let me note that if 1.3270 level holds re-test of 1.3440 level may be expected. According to annual analysis of EUR/USD 1.3450 level is decision level to go up or not.
I hope that you have enjoyed my approach and analysis. Next time, I will analyse stock indices, gold and major pairs. Till then, have a nice time and stay green.