DOLLAR (DXY) ANALYSIS VOLUME III: DXY going DOWN in the DAILY
Hello all! This is the last part of the DOLLAR (DXY) ANALYSIS trilogy. In this analysis, I looked at harmonic pattern formations in the DXY on the daily chart. I believe that the strengthening Dollar is coming to an end soon, probably in a week, two tops.
When you look at the chart, you'll see One Big, with green, and One Small, with black, Bullish ABCD pattern formations.
The BIG ABCD formation with GREEN outline and price levels suggested an upside reversal in the DXY. In the part II of the DXY ANALYSIS trilogy, I talked about a backtest of the previous support level. Therefore, this upside reversal that the GREEN ABCD formation predicted was in harmony with the backtest idea. After the completion of the GREEN ABCD, the DXY downtrend reversed on the daily chart and we saw DXY gaining value and testing 0.5 Fib retracement.
So far so good, but does GREEN ABCD suggest a further upside in the DXY? It is possible. We can possibly go up to 0.618 retracement which is between the 1.272 and 1.618 extensions of the smaller ABCD pattern.
The smaller ABCD pattern seems to be completed right now as an AB=CD pattern. However, it is very early to speak. Because we have to see some downward move in DXY to be sure that this is the top of the pattern. Otherwise, it is possible that the pattern can turn to be an EXTENDED AB=CD with possible 1.272 or 1.618 extension levels.
Considering the upcoming ELECTION, the coming FLUE SEASON and the increasing health concerns due to the PANDEMIC, and the DELAYED STIMULUS package, it is likely that we see some more UPSIDE in the DXY. It should be noted that this is my personal opinion and does solely based on the non-technical reasons. Although, I don't expect to see the bullish action in DXY for longer than a week or two. Because, we are very close to the 95 level and higher DXY will invalidate my general WEAK DOLLAR expectation. For that, please read the FIRST and the SECOND PARTS of my DOLLAR ANALYSIS trilogy.
I apprciate your comments and constructive feedback!
When you look at the chart, you'll see One Big, with green, and One Small, with black, Bullish ABCD pattern formations.
The BIG ABCD formation with GREEN outline and price levels suggested an upside reversal in the DXY. In the part II of the DXY ANALYSIS trilogy, I talked about a backtest of the previous support level. Therefore, this upside reversal that the GREEN ABCD formation predicted was in harmony with the backtest idea. After the completion of the GREEN ABCD, the DXY downtrend reversed on the daily chart and we saw DXY gaining value and testing 0.5 Fib retracement.
So far so good, but does GREEN ABCD suggest a further upside in the DXY? It is possible. We can possibly go up to 0.618 retracement which is between the 1.272 and 1.618 extensions of the smaller ABCD pattern.
The smaller ABCD pattern seems to be completed right now as an AB=CD pattern. However, it is very early to speak. Because we have to see some downward move in DXY to be sure that this is the top of the pattern. Otherwise, it is possible that the pattern can turn to be an EXTENDED AB=CD with possible 1.272 or 1.618 extension levels.
Considering the upcoming ELECTION, the coming FLUE SEASON and the increasing health concerns due to the PANDEMIC, and the DELAYED STIMULUS package, it is likely that we see some more UPSIDE in the DXY. It should be noted that this is my personal opinion and does solely based on the non-technical reasons. Although, I don't expect to see the bullish action in DXY for longer than a week or two. Because, we are very close to the 95 level and higher DXY will invalidate my general WEAK DOLLAR expectation. For that, please read the FIRST and the SECOND PARTS of my DOLLAR ANALYSIS trilogy.
I apprciate your comments and constructive feedback!
Comment:
It is confirmed that the ABCD pattern was an AB = CD pattern. I will wait for a pullback to 0.382, which is also very close to 20 MA, or to 0.500, which is around the same level with the 50 MA. Once those targets hit, I'll look at the candles forming. It will tell if DXY will go up or down after that point.
Comment:
We hit 0.382 retracement of the small ABCD pattern today. I will closely watch candles forming for a possible reversal around these levels.