From the technical perspective, soon after Mario Draghi announced ECB , the dollar's rally began to consolidate into a very well defined . The likely outcome of this technical pattern is a continuation of the prior trend, which is of course, higher. That said, since August, we've seen the pattern fail three separate times, bringing into question the validity of the pattern. Since the October lows, and with the support of Draghi and Yellen, we've seen the price action turn around and take out three significant levels. First, was the from the March highs. Second, was the from the May lows. Third, was the breach into my neutral zone b/w 97.19 and 97.77.
At current, momentum is firmly in the corner. Subsequent closes above 98.00 and 100.00 are essential to confirm a breakout to new highs. Remember, the anticipation of rate hikes is much more supportive of a higher dollar than an actual hike. So I'd expect to see the dollar test the 100 level ahead of the December FOMC meeting. In the meantime, I will be buying the dollar dips!