USD US Dollar Index Daily and Weekly Charts; Overbot; Rising Wedge; Negative Divergence

The US dollar rise has been phenomenal; parabolic in recent weeks. The W pattern bottom last year launches the greenback into the stratosphere. Everyone is on the dollar bandwagon but folks just fell off and are getting run over.

The US dollar daily chart clearly shows the negative divergence top (red lines). Price prints a matching or higher high but the indicators print lower highs (sloping down) showing that they are out of gas. The RSI and stochastics were also overbot and price was above the moving average ribbon needing a mean reversion (lower). The red rising wedge pattern is bearish.

The Aroon remains at maximum bullishness. The green bull line is in the upper atmosphere professing that more dollar highs are on the way. Ditto the bears shown by the red line at zero. The dollar bears have all left town convinced that the US greenback will never come back down ever again. All this analyses adds up to one thing; a spankdown (contrarian sentiment; everyone is on the dollar bull side of the boat with the party in full swing).

So the smackdown off the top is in progress with price trying to stay in that upper congestion zone, but it won't. The MACD, histogram and stoch's remain weak and bleak on the daily so they want to see lower lows in price in the daily time frame.

On the dollar weekly chart, same-o technical analysis only on the weekly instead of daily basis which means the drawdown in the buck will continue for a few weeks. The red lines show the neggie d top that conspired with the daily chart to create a sharp smackdown last week.

There is a caveat in the analysis. Look at the MACD line on the weekly chart. It is flatter than a newlywed's soufflé but Keystone's eyes are not good enough to say that unequivocally. Sometimes the MACD will play games and that flatness to maybe a single hair higher in the tiny line may create a bounce back up to the highs. If so, it will be short-lived and the downside would resume. 

Thus, the likely path for the dollar is down for a few weeks, say 2 to to 5 weeks, the chart will tell you when she wants to bottom out. The other path, is a pop in the dollar this week but it will only lead to the roll over the following week (a jog move on the weekly chart).

Here is the interesting development. The MACD on the USD monthly chart remains long and strong. She wants to come back up again (stronger dollar) on the monthly basis. Thus, the dollar is topping right now and rolling over lower. It should drop In June on the weekly basis but likely by the end of June will begin rising again and in July/August be printing new highs above 104. Keystone is not playing any dollar derivative trades currently. 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 5/24/22: USD 101.666.

Note Added 5/25/22: USD 101.75.

Note Added 5/26/22: USD 101.76.