Thursday, December 29, 2016

USD US Dollar Index Weekly Chart; Overbot; Negative Divergence Developing; Sideways Symmetrical Triangle; Sideways Channel

The US dollar weekly chart was posted the other day and the waiting game continues for the near-term top. The red lines for the indicators over the last two years display negative divergence. Ditto for the shorter term except for the RSI and MACD line (green lines) so price may jog for a couple-few weeks and then roll over once the two parameters turn neggie d.

The dollar has violated the upper standard deviation band so the middle band at 98.50, and rising, is in play. The blue sideways symmetrical breakout occurs at 96-ish. The vertical side that best fits the triangle is about 7 to 8 bucks high. Thus, the upside target area is 103-104 to satisfy the triangle pattern which is occurring now.

The tight bands squeezed out the upside move starting in September-October. Then the long shadow back kiss occurs as the US presidential election took place on 11/8/16 and bingo, the dollar catapults higher never looking back. The dollar pops so the euro drops which pumps the European stock indexes higher.

Everyone and his bro are calling for a higher dollar. In fact, many analysts pound the table and guarantee a higher dollar. The cab driver told Keystone this morning that the easiest trade in 2017 is for a higher dollar from start to finish. Many armchair technicians say the breakout from the two-year brown sideways channel guarantees a stronger dollar moving forward. Maybe they are all wrong?

The ADX shows that the upside move is not a strong trend; there is no sign of life with the ADX. The dollar needs to take a rest and the 100 level forms a logical confluence with the upward rising middle band and 20-week MA and the top rail of the long-term sideways channel. The dollar may jog to get the RSI and MACD line on the bear side so, on a weekly basis, price may move down, up, down, up, down for the roll over. So that is one month. The two years of universal negative divergence (red lines) harpoons the idea that the dollar is going to keep rising higher. There is no long term oomph. 

The USD monthly chart displays universal neggie d with its indicators and the dollar has violated the upper band on that chart. The forecast would be for sideways jogging action for a couple weeks maybe four through 102-104, then a drop down to 100 for a bounce or die decision say in late January. The thinking now is that the dollar will actually move sideways through 2017 confounding everyone that now thinks the dollar will go up here on out. 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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