Dollar Long term -18/5/2023-
• Here is a long term view on the Dollar dating back to 2001
• It is always best to look at the primary larger trend to understand where we are in the market
• The chart printed a symmetrical triangle since July 2001 with its bottom in March 2008
• The Dollar managed to breakout above the triangle in April 2022 shortly after the Ukraine-Russia war started and the Euro fell below parity
• The breakout however, could be a failure according to Bulkowski's rule which says that a breakout is considered a failure if the move didn't go beyond a 20% move. The breakout happened at 100 level so a 20% move would be one hitting the 120 level and what we got was 115
• According to other theories, the failure rate is 10% which we got beyond
• The latest Dollar decline could be seen as a re-test of the breakout level which usually happens more than 50% of the times and the market could be eyeing another massive rally for the Dollar to reach new highs if the pattern proves to be applicable
• This is a very long term view so if the breakout is confirmed, the next big rally could take months or even years
• Zooming in to the 15 month view, I drew the Fibonacci levels for the 2021-2022 rally and we can see that the bulls and bears are fighting around the 50% level now and any sustained rally from here could be seen as a completion of the correction for the major rally
Traders, if you like this idea please comment and like ✅
Here to answer all your questions,
Good luck
• It is always best to look at the primary larger trend to understand where we are in the market
• The chart printed a symmetrical triangle since July 2001 with its bottom in March 2008
• The Dollar managed to breakout above the triangle in April 2022 shortly after the Ukraine-Russia war started and the Euro fell below parity
• The breakout however, could be a failure according to Bulkowski's rule which says that a breakout is considered a failure if the move didn't go beyond a 20% move. The breakout happened at 100 level so a 20% move would be one hitting the 120 level and what we got was 115
• According to other theories, the failure rate is 10% which we got beyond
• The latest Dollar decline could be seen as a re-test of the breakout level which usually happens more than 50% of the times and the market could be eyeing another massive rally for the Dollar to reach new highs if the pattern proves to be applicable
• This is a very long term view so if the breakout is confirmed, the next big rally could take months or even years
• Zooming in to the 15 month view, I drew the Fibonacci levels for the 2021-2022 rally and we can see that the bulls and bears are fighting around the 50% level now and any sustained rally from here could be seen as a completion of the correction for the major rally
Traders, if you like this idea please comment and like ✅
Here to answer all your questions,
Good luck
Ramzi Abou Abdallah, CFTe, CMT
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.