As mentioned in previous posts. DXY seems poised for higher levels (usd strenght) into year end. The index seem to have broken the neckline of an inverse H&S and we would be targeting at least the area of 96-98 in the next few months. Before turning down once again to new lows in the years ahead towards 2023/24 to complete its regular cycle of 7-8 yrs of strenght, followed by 7-8 yrs of weakness observed since 1985.
Trade active:
Dollar index continues to follow our script laid out. Our minimun target is in the 96.25 area (0.5 fib retracement). Ideal target is the 97.75 area (re-test of blue line uptrend and 0.618 fib retracement). Extreme target in the 100 neighbourhood (0.764 fib and H&S target red line).
Comment:
Our minimum target has been reached at 96.24. We do think there is potential to go higher at least to our ideal target of 97.75; however, short term looks a bit overbought and we are getting a sell signal on TD Sequential (not shown) so partial profit taking could be wise as a correction/consolidation could be on the cards in the short term. will keep an eye on it for more signals.
