Hi Everybody!
Today, I'm going to be showing an interesting DXY chart on the 2 Month Timeframe.
On the price action side of things, I've got two different trend channels, a red one and a blue one.
Regarding the red trend channel, the DXY first opened and hit a peak at the midline in 1969, eventually falling below the channel, and retesting its efficacy three different times in a row- in 1972, 1974, and 1976. Once price eventually returned to trading in the red channel, it used the bottom line as support in 1981, making a move above the midline, and bouncing of the midline as support in 1983. From there, price was able to go above the channel, but it still used the top line as support, with a consolidation and bounce above it between 1983 and 1984. In more recent times, price took the top of the red channel as resistance in 2001 and 2002, and super recently, has used the midline as resistance in 2016 and 2020.
Now taking a look at the blue trend channel, it used the bottom line as support in 1978 and 1980, again in 1992, and used it as support as the low of the 2008 recession. Before the move to our most recent swing high in 2016, price used the blue midline as support in 2012 and 2014 to give the dollar some strength. It has since then used the top of the blue trend channel as support in 2018, before hitting the red midline in 2020.
Currently, price is about to return to the bottom of the red trend channel, and once it does, I am expecting the DXY to begin dropping into the blue channel.
By looking at the trend channel in the TSI, we have finally had a close below the midline. Because of this, I expect that the TSI will have to go lower, to the bottom of the channel, either with or without a retest of the TSI midline. To me, this illustrates that the DXY is going to trade into the lower channel, with a midline price around 75, and the bottom channel price around the lower 60s, which would be a 30% drop from where we are currently trading at.
Of course, we have to remain level headed, and see the other perspective. If Bullish, you would want to see a decisive bounce where the 2 trend channels meet, as well as the TSI being able to confirm support back above the midline. This seems like a highly unlikely scenario for me, but it is still good to see the potential on either side of the coin.
I hope you guys loved this analysis and that it shed some light on what the DXY is doing. If so, be sure to give this a LIKE and SUBSCRIBE. Have an awesome day, and as always, be sure to do your own due diligence.
Today, I'm going to be showing an interesting DXY chart on the 2 Month Timeframe.
On the price action side of things, I've got two different trend channels, a red one and a blue one.
Regarding the red trend channel, the DXY first opened and hit a peak at the midline in 1969, eventually falling below the channel, and retesting its efficacy three different times in a row- in 1972, 1974, and 1976. Once price eventually returned to trading in the red channel, it used the bottom line as support in 1981, making a move above the midline, and bouncing of the midline as support in 1983. From there, price was able to go above the channel, but it still used the top line as support, with a consolidation and bounce above it between 1983 and 1984. In more recent times, price took the top of the red channel as resistance in 2001 and 2002, and super recently, has used the midline as resistance in 2016 and 2020.
Now taking a look at the blue trend channel, it used the bottom line as support in 1978 and 1980, again in 1992, and used it as support as the low of the 2008 recession. Before the move to our most recent swing high in 2016, price used the blue midline as support in 2012 and 2014 to give the dollar some strength. It has since then used the top of the blue trend channel as support in 2018, before hitting the red midline in 2020.
Currently, price is about to return to the bottom of the red trend channel, and once it does, I am expecting the DXY to begin dropping into the blue channel.
By looking at the trend channel in the TSI, we have finally had a close below the midline. Because of this, I expect that the TSI will have to go lower, to the bottom of the channel, either with or without a retest of the TSI midline. To me, this illustrates that the DXY is going to trade into the lower channel, with a midline price around 75, and the bottom channel price around the lower 60s, which would be a 30% drop from where we are currently trading at.
Of course, we have to remain level headed, and see the other perspective. If Bullish, you would want to see a decisive bounce where the 2 trend channels meet, as well as the TSI being able to confirm support back above the midline. This seems like a highly unlikely scenario for me, but it is still good to see the potential on either side of the coin.
I hope you guys loved this analysis and that it shed some light on what the DXY is doing. If so, be sure to give this a LIKE and SUBSCRIBE. Have an awesome day, and as always, be sure to do your own due diligence.
