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Technical Analysis - Dollar Index

For past many trading session the Dollar Index has moved within a tight range of 86.50 and 84.00, so the question is do we call a top at this juncture? As much as we would like to and believe to call it a top of this retracement, prudence suggests that we hold back our horses until at least the break below the range of 84.00 is suggested.

The real problem in calling the top actually lies in the fact there is so much activity on the fundamental aspect, and with increasing number of banks, brokers, traders and investors taking a hard stance on dollar the upside seems rather limited while the downside could be propelled at fast pace.

Trades can only be suggested in small lots as its is very much probable at this juncture that the first 'stop loss' region around 86.50 could easily be taken out by option-barrier trades, hence the ideal stop loss levels are at 88.5 and 89.00 levels. The more bearish aspect would be made if the prices breaks above 86.50 and breaks down, making a bull trap and also a H&S failure.

This would be an interesting wait and watch, or an academic short trade.

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