USD US Dollar Weekly Chart 4-Year Record Highs Sideways Channels Sideways Symmetrical Triangle Overbot Negative Divergence Developing

The dollar basket continues running higher sending the dollar/yen currency pair higher now at 113.70 running towards 114. The dollar was moving sideways for the last few years squeezing in with the blue sideways symmetrical triangle pattern until a decision had to be made and whammo; a rocket launch occurs from 81. Using the vertical side of 16 handles, the triangle breakout would project 97 in the future. The green circles and lines show that price is at levels not seen since mid-2010 over four years ago. The 2010, late 2008 and early 2009 tops are at 88-89 and serve as upside targets of uber strong resistance. If the dollar moves above 89 the 97 triangle target is firmly on the table.

The ADX show a strong upside trend in place at 37. The ADX is above the prior high during the 2011-2012 dollar rally which is bullish for the greenback. Drilling down more to the near term, price prints a higher high over the last two weeks but the indicators are negatively diverged (red lines) so a spank down and rest from the obscene parabolic spike is needed and on tap. Note the MACD, however, is long and strong. Thus, after a pull back in the dollar, price will resume the upside and print higher highs again as the weeks move forward. Dollar bears must wait until the MACD line turns neggie d before they can cheer for extended downside.

The dollar may move through the 85-89 sideways channel through 2015 and perhaps through the 79-89 sideways channel for the next few years. The 89 resistance is obviously uber important and a game-changer should the dollar explode above this level. ECB President Draghi's jawboning and stimulus sends the euro lower and dollar higher, however, he must fire the shock and awe QE money bazooka at the Thursday meeting or in the direct weeks ahead to create further euro weakness. Otherwise, the euro will move sideways to sideways higher and the dollar sideways to sideways lower.

The neggie will spank the dollar lower for perhaps a week or few but the long and strong MACD line will send price up for higher highs perhaps teasing the 88-89 area especially if Draghi fires the money bazooka in the days and weeks ahead. In general, a move through 85-89 may be on tap for the weeks and months forward which would frustrate dollar bulls now looking for huge upside and at the same time frustrate dollar bears looking for a huge pullback. 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.