USD US Dollar Monthly and Weekly Charts; H&S; 2-Leg Bull Flag; Diamond Pattern; Expansion (Megaphone) Pattern

The weekly and monthly charts of the US dollar are bowls of spaghetti. On the weekly chart, price has been meandering sideways. The greenback drops to 102 but is not quite at or below the prior lows in January. Therefore, an assessment on potential positive divergence cannot be made until price comes down a bit further.

The chart indicators for the weekly chart are all sloping higher but again, it is not possie d as yet since price needs to make a lower low. Positive divergence means the chart indicators are positively sloped, sloping higher, while price makes another low. It tells you that the selling is exhausted and over and the index is instead loaded-up with fuel to rocket higher. This is not the case for the dollar, at least not yet. As price slumps, the RSI may print a lower low which means the dollar will likely remain soggy and drifting lower for another week or few. The RSI has not reached oversold territory so it has room to move lower and take price lower.

If the dollar comes down to 101 or one hundo, and those thin green lines become thick possie d lines, the dollar will rally going forward. This is likely not the case, however, due to the weakness on the monthly chart.

Staying with the weekly, the blue lines show a head and shoulders (H&S) pattern. The neckline is at 102 so it is all on the line these days. The head is at 113 so the difference is 11. Thus, if the neck fails at 102, the downside target is 91 (102-11). That brown channel below at 90-93 would be a landing zone should the H&S play out.

The weekly chart does not give up its hand yet on what direction it prefers going forward. Price needs to decide if it wants to drift lower (to assess the potential possie d and a rally developing on the weekly basis, or, an H&S failure resulting in a collapse lower for the Almighty buck). A look at the longer-term monthly chart may provide hints on what will happen on the weekly basis.

The monthly chart is spaghetti. Grade-school teachers would smack Keystone's knuckles with a ruler and paddle him for not coloring within the lines; he never learned his lesson. The blue lines show the 2-leg bull flag playing out over the last decade. The first leg takes the dollar from 80 to 100, or 102 if you prefer as 2017 started. This is a 20 and 22-point run for dixie. Next occurs the sideways consolidation zone that lasts from 2015 through 2020. The second leg up begins at 90 so adding 20 and 22 are targets at 110 and 112 to satisfy the bull flag. These targets occur so it is a textbook pattern.

The blue lines also show a diamond pattern during the consolidation phase. Many technicians assume the diamond will result in a move lower out the back end but she can go either way. The distance of the diamond in the middle is about 18 points so adding that to the breakout at 92 is 110; achieved.

The monthly chart also show the maroon expansion pattern, or megaphone, in progress. The megaphone tells you that 80 may be on tap for the downside in the dollar.

Note the orange stars that highlight the overextended price way above the moving average ribbon. A mean reversion was needed and the 2017 pullback is 102 down to 88 as 2018 began. The current mean reversion takes price from 113 down to 102 thus far. Price went down to test the 200-week MA in 2018. If this fractal repeats, price will drop to 88.

As the dollar stumbles sideways for 3 months on the monthly chart with the new April candlestick starting on Monday, the short red lines for the indicators are clearly weak and bleak. Dollar bears cheer while dollar bulls scowl. The indicators tell you that lower lows in the dollar price are expected going forward on the monthly basis. The RSI may dip into bear territory below 50% which is obviously more bearish for the dollar. Check the monthly chart on Monday as the new candlestick begins to see how the indicators look.

Combining the analyses above, and sprinkling some magic voodoo dust on top, the expectation is for the H&S pattern to play out so the dollar will likely trend sideways to sideways lower for many weeks and months ahead. The debt ceiling deadline will become more important with each passing week over the next 3 months and will greatly impact the dollar, rates and the stock market.

Does a collapse of the United States dollar occur a la Venezuela? Is that the plan to usher in the new Federal Reserve's CBDC (Central Bank Digital Currency)? India is currently introducing its own central bank-controlled digital coin. Governments want to track and control all transactions and eliminate cash. Fight the mark of the beast with all your might. Over the last few days, Brazil and China are shaking hands in a smokey back room striking a trade deal that agrees to move away from the US dollar as the world's reserve currency. Communist China wants the world to trade in yuan and/or at least cause the demise of the US via the collapse of the dollar. Trillions of US dollars may be liquidated by governments and others in a very short time period if China has its way ushering in a Brave New World. Be very afraid. 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 Morning, 3/31/23, at 5:38 AM EST: The US dollar teases the 101-handle down to 101.75  yesterday now trading at 102.33. The drama at the H&S neckline at 102 continues. Price is deciding to bounce or die.

Note Added Tuesday Morning, 4/4/23, at 7:53 AM EST: The US dollar drops to 101.79 continuing to tease the neckline and deciding to bounce or die. Price is making a matching low and the RSI remains possie d so the dollar bulls may be able to save the day if they send the dollar higher right away. The drama and potential H&S failure will be decided over the coming days. The tension mounts.

Note Added Wednesday Morning, 4/5/23, at 5:41 AM EST: The US dollar drops to 101.70 and was down as low as 101.44. The battle at the H&S neckline at 102 continues. 

Note Added Thursday Evening, 4/13/23, at 8:31 PM EST: USD 100.952.

Note Added Friday Morning, 4/14/23, at 6:32 AM EST: USD drops to 100.88. The ominous H&S pattern is flexing its muscles. Euro 1.1065.