DXY Head and Shoulders may lead lower. Levels to watch.
My most recent analysis on the U.S. Dollar Index (DXY) was a long-term one comparing the current situation to mid 2018, plotting a potential long-term Channel Up for next year but calling first for a sizeable correction:
This time I bring you back to the 1D time-frame where my call for a shorter-term correction may be taking shape after all, as DXY seems to have formed a Head and Shoulders (H&S) pattern (which is a bearish reversal formation). That leaves us with 2+1 potential downside targets:
1) If the underlying Pivot trend-line (green dashed line) breaks, then I expect DXY to seek the bottom (Higher Lows trend-line) of the Channel Up as shown on the chart and potentially make contact with the 1D MA50 (blue trend-line).
2) If a 1D candle is closed below the 1D MA50, then I expect further downtrend towards the bottom of the blue Channel, which I expect to be the dominant long-term pattern as we move forwards.
3) If that breaks too however, I expect one final bearish target on the 1D MA200 (orange trend-line) and the 0.786 Fibonacci retracement level.
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This time I bring you back to the 1D time-frame where my call for a shorter-term correction may be taking shape after all, as DXY seems to have formed a Head and Shoulders (H&S) pattern (which is a bearish reversal formation). That leaves us with 2+1 potential downside targets:
1) If the underlying Pivot trend-line (green dashed line) breaks, then I expect DXY to seek the bottom (Higher Lows trend-line) of the Channel Up as shown on the chart and potentially make contact with the 1D MA50 (blue trend-line).
2) If a 1D candle is closed below the 1D MA50, then I expect further downtrend towards the bottom of the blue Channel, which I expect to be the dominant long-term pattern as we move forwards.
3) If that breaks too however, I expect one final bearish target on the 1D MA200 (orange trend-line) and the 0.786 Fibonacci retracement level.
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** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. **
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