USD Dollar Index Daily Chart Inverted H&S

It is always smart to look back at previous prognostications, good or bad, to assess how the technicals play out.  In early August Keystone posted this dollar chart highlighting the inverted H&S shown by the blue lines; the 79-ish target is achieved. The majority of traders thought the call was nuts as the dollar languished at 73.5 but you know how it goes when the herd is all thinking one thing, in this case it was the demise of the dollar.  Jimmy Rogers played the dollar from the long side solely based on the negative sentiment and he made a bunch on this move.  The technicals forecasted it perfectly.

Note the ADX at 37 indicates that the trend upwards is a strong trend as well. Over the last couple weeks, price high to price high, note the negative divergence with RSI, MACD histogram and stochastics, but the MACD and ADX remain long and strong. The negative divergence is creating the current pull back. The chart remains favorable to the upside. The 76-79 range should hold solid for a while. Over time, we will see if the inverted H&S shown by the red lines plays out to the target of 81 (for the baseline). Projection is sideways to sideways up until Chairman Bernanke announces QE3 which should cause dollar weakness to reappear. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any other site associated with this site. Consult your financial advisor before making any investment decision.