Friday, September 19, 2014

USD US Dollar Weekly Chart Sideways Symmetrical Triangle

The dollar spike since May is remarkable. The thick green lines show a sideways symmetrical triangle pattern with vertical side of about 16 handles. Price breaks up and out of the triangle at 80 so 96 is the upside target. The stochastics are overbot and will help create a near-term pull back in concert with the dollar daily chart (see previous chart). The green lines show a long and strong profile wanting to see higher highs for the dollar after any pull back occurs and the dollar desperately needs to take a breather from the obscene spike higher. The 10-year yield has been moving up with the higher dollar so any dollar softness in the near term would send the yield slightly lower. The 10-year yield drops from 2.64% to 2.60% over the last few hours.

The RSI and stochastics are in overbot territory. The move has such strength that the dollar would be expected to remain elevated in the 83-87 area for the months ahead. Moving into the end of the year and start of 2015, the 85.5-86.0 area is targeted. The dollar may spend many weeks and months moving sideways with the sideways up bias and ultimately target the 88 resistance in 2015 and 2016, or far sooner if a negative market event occurs. If 88 is taken out then the path to the 96 triangle target will be firmly in play.

For the weeks forward the dollar will likely trade sideways choppy with higher highs expected. A more extended pull back and softness and sideways to sideways lower bias may occur moving towards the end of the year and into early 2015 but the chart is very favorable for the dollar bulls in the intermediate and longer terms. If deflation bites the US as it is biting Europe and infecting other parts of the globe, the dollar move higher would occur in concert with deflation but the yields would not be expected to rise as traders and analysts expect. The path will need to be reassessed every couple weeks. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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