DXY Weekly chart
DXY Weekly chartDXY looks ready for a strong move up while markets are ready for a strong correction.
In the last four weeks, the US dollar (DXY) has consolidated above the level of key support of 102.3-102.57.
From a macro perspective, we have two key patterns that, if will play out, might push the DXY as high as 116.670 (Weekly gap).
The first bullish pattern is the falling wedge and looks like DXY is trying to break the first red channel of resistance (103.368-103.549) and head to the next channel of resistance of 104.37-104.634.
The top of the falling wedge currently is located at 105.532.
If the DXY manages to beak the resistance levels and move into the top diagonal of the rising wedge, then the chances for the wedge to play out are increasing.
The second bullish pattern is the big bullish flag with the media, currently, at 104.53 (red descending dotted diagonal). The top of the channel currently is at 111 level.
The Target, if this bull flag will play out might be at 125-125 level. For now, I know that this scenario seems impossible but we should keep our minds open to this scenario as well.
Looking at the S&P500 and US100, the DXY above scenario has a good chance to play, considering how overextended and overbought the S&P500 and US100 are.
My main point of interest is the top of the falling wedge (105.532) and the median of the bullish flag (104.585). Once those two are reclaimed, I will become very bullish on DXY and bearish on any key currencies paired with DXY.
In conclusion. Until the median of the bullish flag and the top diagonal of the falling wedge are not reclaimed, DXY can still remain bearish. Once those two levels are reclaimed, DXY can flip bullish.
Note: Check your broker chart and see the price level difference. This is just my opinion and it is not meant to be a signal or financial advice. Trade safe and manage your risk.
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