The US dollar chart has been of interest lately especially with the C&H (cup and handle) pattern. You can scroll back to the prior chart for targets and so forth. The drop in the dollar yesterday comes back to back kiss the brim line of the cup and handle. The bulls are successful with the back test of support and the dollar moves higher to 91.90 today (blue star). The back kiss occurs as ECB President Lagarde stumbles through a presser and then afterwards further confuses the situation (euro moves opposite the dollar). The central bankers are the market and starting to trip-up from all their fancy dancing.
The red lines show the neggie d and overbot conditions that spanked the buck backwards but the green lines show the long and strong MACD line and ROC that want to see a higher high in price (above 92.5). The scenario not discussed on Wall Street is the stock market selling off now with yields dropping, the dollar rising and gold, silver and commodities dropping. Won't everyone be surprised?
Bring up the USD weekly chart and you see long and strong histogram, stochastics, MACD so the dollar wants to make some additional highs on a weekly basis so that would be this month into April. Are you starting to sniff and smell a potential March 2020 redux? Time will tell.
On the left is a typical break out pattern for buying a stock when it breaks out from a C&H. It is the same idea for a channel breakout. If the light blue line is the brim of the cup and handle, the stock is bot when it breaks out above the brim line. Sometimes they run and don't look back. Most of the time, price will come back to back kiss the breakout line that was resistance that now becomes support. This is how price makes double-sure that it wants to head higher. Like when you get in the car and are ready to drive away but you stop the engine and run back inside to make double-sure you pulled the iron plug out of the wall (does anyone use an iron and ironing board anymore?; probably not since everyone acts like a big shot so maybe ironing is beneath them?). Same dealio for price.
Price wants to head higher but it wants to check one last time to make double-sure that it wants to go higher so it comes down to tag the line it broke out from and test it. If it fails here, the bears have a field day and will slash and murder the stock. And this goes for the dollar above. USD must remain above that brim line heading higher to stay out of trouble. Usually the back test occurs and it is off to the races higher.
The three main buy points on a break out is when it first breaks out as mentioned, then after it successfully back kisses, that is another buy entry, and then the stock can be bot a third time, or a long position entered for the first time, when price takes out that first high it made when it broke out. That is when you know up is the direction ahead. For the dollar, if it it tags 92.5+, it is going to remain buoyant for many weeks ahead. 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 11:55 AM EST: USD 91.666.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.