Thursday, June 23, 2011
EDIT: Of course with good greece news breaking right before the close, this doesn't seem like it will sell off to the lows. I have exited my short positions and will let this play out and find a new setup.
(Chart 1 - Dollar index daily zoom)
(Chart 2 - Dollar index daily)
Dollar index is in a macro uptrend (light blue channel)
75.59 is an important resistance (low of a MML trading zone)
This level is also currently the midpoint of the channel
The orange line connecting the recent lows is the "neckline" of a developing head and shoulders.
Here is how I see this playing out:
It will be hard for the DXY to go up much further from here with what lies overhead.
I see it possibly testing 75.78, but then selling off back to 75.
Eventually the orange neckline will be higher than 75, and this will create a bullish wedge/triangle with that line as the low bound, and the trading zone of 75.79-75.98 as the upper bound.
Should we eventually get above 76, then 76.56 is the next major resistance
Should we break that neckline, I think we will retest 74.41, but I believe in the USD short term