Dollar pullbackThe euphoria seen on 16th March is exactly what's needed to create a divergence. . We've a bearish divergence in RSI too, breaking away from the trend since May 2014.
A pullback to 94 seems likely at this point.
Dollar-index
US Dollar Index To Fall - First Support at 84.50The US Dollar Index has been rising strongly for most of this year, coincident with a major decline in broad based commodity indexes. However, we are currently seeing signs that the current price level may be the end of this strong run and lead to a major consolidation - likely coincident with a rally in overall commodities.
This chart shows the daily Dollar Index. There is a notable divergence on the momentum indicator between the October high and the current December high. The notes on the chart show that a typical price target after a divergence pattern would be for a retracement to the price low of the divergence pattern - in this case at about 84.50 which would be the next major horizontal price support on the chart.
Also while not shown on the chart the current Commitment of Traders data shows that the large speculators maxed there net long position at the October high as well, and the current run up from Oct to December has been on commercial buying which is opposite their normal pattern, and is a typical and classic sign of capitulation in a trend. This creates a compelling technical set-up for a sell out or short position. And the CoT data gives us confirmation from the "fundamentals" as evidenced in the extreme net short of the "smart money" commercial traders. The divergence or capitulation in commercial positions just gives us another aspect of market psychology suggesting that the trend is very close to an end.
SHORT for DXY - possible up to 90.xx - but then...DXY - possible up to 90.xx - but then the DXY could implode in it self.
This has more than a lot of technical reasons: macroeconomic - market economy and the geopolitical conditions, both act important parts.
This is only a first rough overview - we have to wait for the completion of the patterns.
Dollar index testing 90 level for 4th time since 2008Previous tests of this level were rejected.
FED Reserve has said they don't want the dollar
to go too high. I believe a shorting opportunity
may be near.
USD indexdifficullt to say what the USD is working on....
shown is a bullish scenario, where:
- blue wave 3 is 1.62% extension of wave 1
- blue wave 4 a triangle
- black 1 reaching the previous 4th wave
-black wave 2 retracing 62% of black 1
I stay sidelines and wait if we get a clear 5 waves up as a confirmation of at least shortterm uptrend in USD.
