USD US Dollar Index Weekly Chart; Rising Wedge; Negative Divergence; Tight Bands

The US dollar index rallies higher this year meeting Wall Street's consensus expectations which typically does not occur. Most Wall Street pundits expect an ongoing stronger dollar. The chart is not agreeable to that outcome going forward but a news event could always occur that sends Forex into a tizzy.

Price prints a higher high and the indicators are in negative divergence. The rising wedge pattern is bearish. Price tagged the upper standard deviation band and retreated to the middle band. The lower band at 95.23 is on the table. The tight bands indicate a big move is coming in this weekly time frame but it does not predict direction. Last week, the rally popped price higher (white candlestick) and many thought the buck would break-out higher but alas, the dollar is slapped lower this week (red candlestick) and so are those trying to chase it higher.

The ADX shows that the move lower in the dollar during 2017 and into 2018 was a strong trend lower. It petered out after price started rallying a year ago. Despite the long one-year trend higher in the dollar, the ADX is down in the cellar signaling that this ongoing rally is NOT a strong trend.

The dollar tests the 20-week MA at 96.34 and may move lower to the 200-week MA at 95.82. The 50-week MA at 94.91 is swooping higher to meet the lower standard deviation band at 95.2-ish. The 100-day MA is at 94.14. All these levels are support targets. The expectation is for the dollar to soften to 94-95 for a few weeks. It currently prints at 96.75.

The euro chart was posted the other day so it is the mirror image of the dollar chart since these currency baskets hold about 65% of each other's currency. The euro chart displays a falling wedge and possie d which indicates that the euro will want to move higher.

A lower dollar should create buoyancy in commodities, gold, silver and perhaps oil. Ag commodities (reference the prior DBA chart) may receive love if the chart above plays out and the dollar proceeds with a sideways to sideways lower bias for the weeks to come. As the dollar dips, the multinational companies such as PG, PEP, KO, AAPL and GOOGL may feel love so those charts need a perusal for possible set-ups. A multi-national with a 2-hour and daily chart in positive divergence would be a tempting pick with the dollar expected to move lower. The currencies are a crap-shoot because the central bankers can make an announcement at any time and as we all know, 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.