DXY - 20 years in a nutshell (Resistance vacuum ahead of now)
The $index has been in a bullish continuation trend for over ten years now ever since that reversal Bullish bat pattern completion back in 2011 as an effort to recover USD and US economy from the 2008 recession.
We have witnessed some 6 year long price consolidation between 2016 and 2022 (Darvas Box 1) after the price made the first top of the box at 104 back in 2016. This consolidation has finally broken higher into a new zone (Darvas Box 2) this year in 2022.
Potential Prospects:
1- Historic 20 year data reveals that there is apparently no resistance between this current price (~111) and 120 price level, it is like a vacuum, nothing in between
2- 120 is the point of confluence between historic consolidation area and Darvas Box target
3- This target at 120 is invalid if weekly timeframe breaks lower than 104 before it hits 120. We shall then deem it a bearish reversal and not continuation, until that happens, this analysis is valid
4- If it breaks higher than 120, we will see about that later
Further evidence:
1- FEDs hawkish counter inflation policies
2- Recent Interest rate hike to 3.25% from 2.5% and further news for an increment to 5% in FOMC conference, as told by Jerome Powell (FED chairperson). Contributing to the continued strength of USD against other currencies
We have witnessed some 6 year long price consolidation between 2016 and 2022 (Darvas Box 1) after the price made the first top of the box at 104 back in 2016. This consolidation has finally broken higher into a new zone (Darvas Box 2) this year in 2022.
Potential Prospects:
1- Historic 20 year data reveals that there is apparently no resistance between this current price (~111) and 120 price level, it is like a vacuum, nothing in between
2- 120 is the point of confluence between historic consolidation area and Darvas Box target
3- This target at 120 is invalid if weekly timeframe breaks lower than 104 before it hits 120. We shall then deem it a bearish reversal and not continuation, until that happens, this analysis is valid
4- If it breaks higher than 120, we will see about that later
Further evidence:
1- FEDs hawkish counter inflation policies
2- Recent Interest rate hike to 3.25% from 2.5% and further news for an increment to 5% in FOMC conference, as told by Jerome Powell (FED chairperson). Contributing to the continued strength of USD against other currencies
