USD US Dollar Weekly Chart; Oversold; Falling Wedge; Positive Divergence; Lower Band Violation

Uncle Buck is all fueled-up and ready to go. Picture a massive green rocket on a launch pad with a big ole dollar sign on the side. A catalyst may occur as the year begins, even if not, it does not matter, the fuel is loaded and overflowing out on to the launch pad. The control room says its gotta go, go, go, there is no more time to play around. It will be a sight. Look at the potential fractal from March that may repeat (maroon rectangle).

The green falling wedge is uber bullish. The pops, or launches, from a falling wedge can be quite spectacular. The RSI and stochastics are at or near oversold agreeable to a bounce. The green lines show universal positive divergence across all indicators, thus, the possie d fuel is in the rocket ship now. All it has to do is begin launching.

Price has violated the lower band so the middle band, the 20-week MA at 92.37, is on the table and upper band at 95.14. Note the confluence of the upper band and the 50 and 200-week MA's at 95.14-95.71. This cluster may further slump to the important horizontal price support/resistance line at 94.7-ish. That 94-95 range may act as a magnet for price going forward.

The red Aroon line is pegged at one hundo and green line at zero. The sentiment cannot become more bearish. Everyone despises the dollar and the Aroon verifies the maximum bearishness. The dollar is at a 2-1/2 year price low and the negative bets on the dollar are the highest in history. This is going to be fun to watch. Once the dollar begins moving higher, the shorts will panic and the March redux may be on tap.

The ADX is in a stratosphere and identifies the long down move as a strong trend lower, however, that ADX number is massive, again, an extreme you never see, so it only has down to go, and the strong trend lower for the dollar would be over once the ADX slips below 30.

The holidays have been maintaining the status quo in markets as well as the constant stimulus and vaccine drum beat. The euro theatrics and ECB President Lagarde has also impacted the dollar. Trading can get back to normal as the new year begins. A big up in the dollar is expected contradictory to 99.9% of Wall Street that guarantees a down move.

Now that you are digesting the above you decry, "Blasphemy! Everyone and his brother is short the dollar. Don't you know that the dollar is going down? Everyone says so." Keystone bumped into Aunt Tillie in front of Walmart the other day and was surprised at the tale she told. Tillie is a very frugal blue-haired gal, that volunteers in the church cafeteria each Sunday. She placed her entire life savings with the new brokerage in town, called Takeayamoney, next to the Chinese restaurant. Tillie said she bot Apple, Amazon, Tesla and Peloton stock. She said she does not understand it but Jimmy Chisler, that just graduated from the community college, recommended those stocks as the best. He also placed half of the money in a dollar short position because he said it is the easiest trade going forward. There is a lot of people new to trading that are going to get hurt bad over the next month or so. If you are long the stock market, get yourself out.

If you were short the dollar, take the money and run; count your blessings that the dollar did not pop already. Dollar long is the trade going forward. Of course a news bomb may hit the tape but if the chart has its way, the dollar rocket wants to ride to the moon. If the dollar pops a la March redux, stocks and gold will collapse. Stay alert. The US dollar, DXY, dixie, or USD, prints a LOD at 89.52 and is now at 89.87. Euro 1.2222. Gold 1897. SPX 3730. VIX 22.90. The control room says it is all systems go for the dollar rocket. Clear the launch pad area at once. 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 Friday, 1/1/21: Happy New Year. The US dollar is at 89.93. Euro 1.2137. SPX is at an all-time closing high at 3756. VIX 22.75.