USD US Dollar Index Daily Chart; C&H; Upward-Sloping Channels; Overbot; Negative Divergence Developing

That is a serious plate of spaghetti, er, with the C&H, call it a bowl of pasta. The green lines show the falling wedge, oversold conditions and positive divergence Keystone used to call the bottom at the start of the year. Everyone threw tomatoes as usual proclaiming that the dollar is guaranteed to go lower. That was the 89 handle and now it has a 92 handle. 99% of Wall Street was wrong. They only missed it by thaaaattt much.

The dixie, DXY, or USD, moves higher through that upward-sloping green channel and then up through that parabolic purple channel as things go nutso the last couple weeks. The dollar tags the upper green trend line so a pullback would be in order and that is echoed by the overbot stochastics and neggie d (red lines). The MACD line and RSI, however, are long and strong so price will want to come back up after a jog move lower (down-up; one day down the next day up). That may turn all the indicators neggie d, you have to wait and see. If not, another jog should do it so price should top out, say, within four days, so this week.  The dollar will then fall for several days.

Note how price came up to tap exactly on the resistance at 92 which was the key support from November and was spanked down. The 92 is strong resistance and if breached may take a while to chomp through the congestion at 92.00-92.75.

Back to the C&H. Novice technicians are wondering what a C&H is? Maybe it is coat and hat since it is wintertime. The cup and handle pattern is clearly shown in brown. You can see the larger cup, or bowl, part on the left with the handle for your fingers on the right. C&H's are great bottoming patterns. The base of the cup is 89.30. The brim using the high point of where the cup and handle meet is 91.50 so that is a 2.20 difference so 93.70 is the target if the 91.50 'brim' is breached. It was breached. The 93.70 would occur by blowing through the blue zone like it was not even there. If a March 2020 redux occurs, stocks will crash and the dollar will sky rocket to 93.70 and higher.

But taking another look at the C&H, that middle part was only a one day event up, and then the next day it had collapsed all the way back down quick. Let's take away that nipple and use 91.10 as the brim. This is a 1.80 diff so the breakout above 91.10 would target 92.90. The lower brim is a nicer fit for the pattern if you look at the price touches. Lo and behold, the 92.90 target is basically that upper blue line at 92.75-ish. The 200-day MA is zooming downward to also meet at this confluence area, say, 92.80-93.20.

The weekly chart has long and strong indicators so the move higher in the dollar will continue in the weekly time frame. Back to the daily chart above, the pink boxes show the downtrend almost becoming a strong trend but it did not, then the uptrend almost becoming a strong trend in early February but it petered out and the dollar is not considered to be in a strong uptrend now, it is bumping along in more of a sideways direction. This hints at more up but not at the same pace. The Aroon positive cross occurs so it wants to see a higher dollar.

The dollar top is in on the daily this week some time as soon as the RSI and MACD go neggie d. By these two indicators not yet going neggie d, they have left the door open for the dollar to rocket launch vertical a la March 2020. This week will be interesting. The central bankers are the market. 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.

Note Added Monday Morning, 3/8/21, at 6:38 AM EST: US dollar 92.20. Euro 1.1876. VIX 27.32. S&P -22. 10-year 1.59%. Bitcoin 50.3K.

Note Added Monday Afternoon, 3/8/21, at 12:52 PM EST: USD dollar 92.31. 10-year 1.60%.

Note Added Tuesday Morning, 3/9/21, at 6:41 AM EST: USD dollar 91.92. 10-year yield drops to 1.52%.