Daily US Dollar Index - Bullish Bias.
To determine whether price is trending up or down - is it making higher highs and higher lows (uptrend) or is making lower lows and lower highs (downtrend.) At the start of December, the price of the US dollar started a down trend. It made lower lows (highlighted by orange circles) and lower highs (highlighted by yellow circles.) A trend reversal happens when the price fails to create a new lower low and price rises above the previous lower high. An inverse head & shoulders pattern is a perfect example of this as price at the right shoulder failed to go below price at the head.
We can also see a huge bullish candle breaking a descending inner trend line confirming a trend change for the time being.
An extra confluence for my bullish bias is my moving averages have crossed to the upside (just before the trend line break) hinting price is to rise. On the weekly time frame, my moving averages are about to cross over to the upside too - another confluence.
A simple A,B,C,D pattern shows us a 61.8% Fibonacci retracement at the C leg. I'm expecting price to reach 97.00 to complete the D leg and pattern.
If we get a break of the neckline from the head & shoulders pattern, and a break of the weekly resistance (we've had 3 weeks where price has failed to break above it) we could see price test the outer descending trend line. If we can get a break of that, I think price may head up to 100.00 in the weeks to come. Measuring the head to the neckline and copying it to neckline breakout area. Lines up well with monthly resistance at 100.00
Just got to wait and see how it plays out!
To determine whether price is trending up or down - is it making higher highs and higher lows (uptrend) or is making lower lows and lower highs (downtrend.) At the start of December, the price of the US dollar started a down trend. It made lower lows (highlighted by orange circles) and lower highs (highlighted by yellow circles.) A trend reversal happens when the price fails to create a new lower low and price rises above the previous lower high. An inverse head & shoulders pattern is a perfect example of this as price at the right shoulder failed to go below price at the head.
We can also see a huge bullish candle breaking a descending inner trend line confirming a trend change for the time being.
An extra confluence for my bullish bias is my moving averages have crossed to the upside (just before the trend line break) hinting price is to rise. On the weekly time frame, my moving averages are about to cross over to the upside too - another confluence.
A simple A,B,C,D pattern shows us a 61.8% Fibonacci retracement at the C leg. I'm expecting price to reach 97.00 to complete the D leg and pattern.
If we get a break of the neckline from the head & shoulders pattern, and a break of the weekly resistance (we've had 3 weeks where price has failed to break above it) we could see price test the outer descending trend line. If we can get a break of that, I think price may head up to 100.00 in the weeks to come. Measuring the head to the neckline and copying it to neckline breakout area. Lines up well with monthly resistance at 100.00
Just got to wait and see how it plays out!