This chart is revealing something... There is a signal that is interesting to us, it came in 8-March. To us this is a clear reversal signal. This session/day ended as a Doji before reaching 0.618 Fib. retracement and now we see full green.
After the initial bullish move, after the "reversal," we get a price peak. These moves tend to be corrected by 50-62%. When the reversal signal comes in right around this level —the Doji 8-March—, this can tell us that we have a higher low.
What follows the initial move is a continuation, based on the higher low. The continuation indicates the DXY moving to hit a higher high relative to last month and this is a move that can last within two weeks to months, or maybe four months, to fully develop.
It will be interesting to the see the effect on correlated markets and/or how other markets will behave while the US Dollar Currency Index goes on a strong bullish wave.
Namaste.
Trade closed: target reached
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We did get our higher high here so this trade idea is now complete, but I see a reader asking what comes next.
It is a very tricky situation.
The rejection in the same range as the previous high indicates the bulls were not strong enough to break the resistance but, this can easily end in a higher low (small retrace) before another try at resistance.
The fact that the action came from a higher low, we are talking on an intra-day basis, can tell us that the bulls were the ones to follow up. If they were the ones to follow up, before a lower low can happen there needs to be more than one try at resistance, so, we can conclude the following: The DXY will challenge resistance again (last high) before producing a new low compared to 8-March.
I will publish a new trade idea considering the chart as it is now and how the above dynamic can play-out, or at least develop the idea from there.
Thank you for reading.
Namaste.
Comment
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It seems there wasn't enough time to post an update but, how far up can it go? What is the chart saying now?
Just hitting "play" here we can see that everything is on track now to hit our main target at 106.5 (up). We will aim at this target and publish an update if anything changes.
If you want a more detailed update, just boost/comment and I shall get to work for you.