This chart shows the US Dollar from 1986 to 2016. Each candle represents a period of one month. The first thing we should notice is that we do not know where the top of the market was in late 1985 due to limitations on the data provider. So in order to establish long term trend lines I first drew the solid thick blue trend line off the two major bottom reversal points. I then drew in the thick dotted blue trend line parallel to the thick blue trend line off the first highest reversal point on the chart.
Next I drew in the two green dotted trend lines and the two solid green trend lines. Notice their similarities. Next I added the two red ovals. Notice the trading pattern within the first red oval and compare to the trading pattern within the second red oval. Notice the similarity. It appears the price action of the most recent rally is copying the first rally. Based on this analysis we can forecast that the US Dollar will continue to work its way higher to the overhead resistance from the thick blue dotted trend line or resistance line. Thus there is a high probability the US Dollar will continue to rise long term to around 110.00.
This analysis shows the higher probability analysis. Keep in mind, however, this is just probabilities and the trend could take an early turn downward.
Based upon this analysis all the major currency pairs where the US Dollar is the Base should move in a downward direction over the long term. All other major currency pairs should then move in an upward direction over the long term.
Next I drew in the two green dotted trend lines and the two solid green trend lines. Notice their similarities. Next I added the two red ovals. Notice the trading pattern within the first red oval and compare to the trading pattern within the second red oval. Notice the similarity. It appears the price action of the most recent rally is copying the first rally. Based on this analysis we can forecast that the US Dollar will continue to work its way higher to the overhead resistance from the thick blue dotted trend line or resistance line. Thus there is a high probability the US Dollar will continue to rise long term to around 110.00.
This analysis shows the higher probability analysis. Keep in mind, however, this is just probabilities and the trend could take an early turn downward.
Based upon this analysis all the major currency pairs where the US Dollar is the Base should move in a downward direction over the long term. All other major currency pairs should then move in an upward direction over the long term.