USD US Dollar Daily Chart Sideways Triangle and Channel

The dollar is an inverse look of the euro since the two move opposite to each other; euro up = dollar down = equities up, and, euro down = dollar up = equities down. The dollar has not come down for a matching low as compared to a few days ago so a determination of positive divergence cannot be assessed as yet. The early December low was created by the lower trend line holding, the lower BB was touched, and the positive divergence in the indicators.  Therefore, the dollar does not have a lot of need to come down since it is showing that it has some preference to remain buoyant.  Right now is a critical test since the dollar sits at the lower trend line again.

The blue sideways triangle shows the dollar moving towards the apex, the thought is that the dollar should recover and remain inside the triangle since the indicators are agreeable to price buoyancy. The vertical side of the triangle is about 4 or so bucks, thus, if the dollar bulls (equity bears) break up thru 80.5, the 84 resistance would be targeted. If the dollar bears, euro bulls, and equity bulls have their way, the dollar would now collapse out the bottom of the triangle and target 76 which means the SPX wold catapult to 1500+.

Note how overall, a sideways channel thru 79.0-81.5 is in play and the dollar is in the middle of this range currently. The euro is also in a sideways range but it is at the top of its sideways channel.  The red circle shows the death cross in October so the dollar is under where this oft-cited signal occurred. Projection is a move up for the dollar from here, corresponding to a weaker euro, and weaker equity markets.  The green circle cannot be ruled out over the next couple days where the dollar drops to 79.4-79.8 to touch the lower BB and create a lower low in price to lock in positive divergence. This subtle move lower in the dollar would provide lift to the SPX into the 1420's and 1430's, but this behavior would be expected to reverse in short order. The euro must be weakened in early 2013 to help increase Europe's growth. 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.