The US Dollar Index looks as if it may present a trading opportunity in the near future. The September contract closed today at 81.21. The life of contract low for the September contract is 80.87. If prices can move lower and close below 80.87, then there will be a trigger to enter this trade to the downside. Trend Seeker is already showing a downtrend.
How low will prices go? On the weekly chart, there is a five year low of 80.48. On the monthly chart we can see that the 80 level is a major level of support. So, we could expect prices to drop to 80.
Because of the high margin in this market, I will buy a put option if I decide to trade this market. I'm looking at the September 81 put which closed today at 525 points or $525. This option has 60 days remaining. I would expect that this option would gain in value by approximately $1000 if prices do move down to the 80 level.
To take a look at all of my completed and prospective trades, please to www.mylearn2trade.com.
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