DOLLAR INDEX SET FOR A RALLY TO 93 LEVELS
The chart of the DXY shows the following:
a. Hammer pattern at the end of a decline.
b. Price drop into a 1.272 extension of prior contra trend.
c. Pivot formation at the median line.
d. Divergence in Rsi.
These indicate a possible bottoming of the index for the moment. Currently, the newsflow for the Dollar seems to be quite adverse. China easing off, Germany including the Yuan in its own reserves, bullish forecasts on the Euro, a very strong trend in the Yuan at the moment added to local issues in the US as well, are all factors that are pressuring the Dollar index down.
Reversals happen when outlook appears the worst. While one may not want to call for any big reversal here, the collection of the technical indicators certainly seems to suggest that the Dollar may be at a bottom and is more likely to rally from here. A return back to the top of the pitchfork channel could see an improvement to 93 levels for the DXY
a. Hammer pattern at the end of a decline.
b. Price drop into a 1.272 extension of prior contra trend.
c. Pivot formation at the median line.
d. Divergence in Rsi.
These indicate a possible bottoming of the index for the moment. Currently, the newsflow for the Dollar seems to be quite adverse. China easing off, Germany including the Yuan in its own reserves, bullish forecasts on the Euro, a very strong trend in the Yuan at the moment added to local issues in the US as well, are all factors that are pressuring the Dollar index down.
Reversals happen when outlook appears the worst. While one may not want to call for any big reversal here, the collection of the technical indicators certainly seems to suggest that the Dollar may be at a bottom and is more likely to rally from here. A return back to the top of the pitchfork channel could see an improvement to 93 levels for the DXY
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