Friday, January 23, 2015

USD US Dollar Index Monthly Chart 11-Year High Fibonacci Retracements Inverted H&S

The dollar is running parabolic from 80 to 95 in only seven months a gain of +19% huge for a currency. The dollar is rising a ridiculous +2% and more per month for over a half year. The US dollar chart is the inverse of the XEU euro chart. For the big move in the dollar and euro during 2001 to 2008, the euro is at its 62% Fib retracement but the dollar is only nearing its 50% Fib at 96.06.

The dollar is at highs not seen since 2003. The RSI is overbot, ditto stochastics. The indicators are long and strong wanting higher highs in the monthly time frame after a pull back occurs. Negative divergence should develop in the months ahead creating a top. The 96 and 102 Fib's are in play. The brown inverted H&S targets 113 but that can occur a year or two down the road. The breakout at 90-92 is important so price would be expected to come back to show it respect (200-week MA is 89.81). The dollar may simply stagger sideways through 90-102 for 2015 into 2016 and frustrate those looking for a continued vertical spike higher.

The indicators are wanting higher highs in the dollar in H1 2015 but the dollar should peak perhaps in the February-July time frame. The 113 and 120 levels are probably not on the radar until 2016-2018 but if the euro plummets from here through 1.08 towards parity, the dollar index will be spiking up through 102 towards 108, however, this is not currently expected. The expectation is for the rise in the dollar to slow and the drop in the euro to slow but both will remain around current levels for a few weeks and months. 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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