Dollar - bearish divergence

On the above 1-day chart the dollar has quite literally exploded . Up 17% against a basket of currencies and a whole lot more against others since the ‘buy’ signal in early 2021. I’m calling time on this run for a few good reasons:

1) The ‘great sell’ signal.

2) The obvious bearish divergence. 8 oscillators are currently printing bearish divergence with price action.

3) The 6-day chart below. You may recall the topic ‘Bitcoin and the Bollinger Band’ I recently published? Two candle bodies have now printed outside the band. Remember 95% of candles print inside, within 2-standard deviations of the mean. Last events:

Today
November 2021
January 2018
December 2016

These events are not common, but very profitable if you play them correct.

4) Stochastic RSI on the same 6-day chart. It is a number between 0 and 100. With 0 = extreme oversold. 100 = extreme overbought. Currently it is at 99.99.

5) Big picture 10-day chart. Expecting a back test of the 100 level before continuing rally.

In summary the dollar index remains in a bull market however a correction to back test past resistance would seem healthy. This would give risk asset a chance to breath.

Ww


6-day chart

10-day chart - the big picture

Trade active:

Dollar dropping with most risk on assets receiving some relief, except Bitcoin.

Comment:

A notable head and shoulders is forming on the index when studying the daily chart. March 2015 was the last time a 'great sell' signal appeared at the same time price action began closing candles under the 26-SMA (green line). It wasn't pretty for dollar long positions at this time.

Interesting weeks ahead...

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And this folks is what a melt up looks like. The FED have pumped the dollar up to bubble levels. When this rolls over onto an oversold stock market the effects will be nothing like we've for decades. Fun months ahead.

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On the daily chart below a Gravestone DOJI candle prints following rejection of past price action support. This is a good development for risk assets.

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Ha! So much for that DOJI. That was a lesson and why it is important to wait for confirmation! Got to have confirmation candle.

Well this is interesting. The momentum is showing no signs for pull back at the moment, could touch 120 before correcting, where there is considerable monthly resistance.

Comment:

Seems like the dollar is on a mission to destroy every other currency. Euro / $1 peg now broken.

FED end game appears to be... no one on rest of the planet purchases good and services from the US because it is too expensive. Thought it was Russia that had sanctions?? Confused..

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Dollar index parabola breakout.

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Near term am looking for the index to make a move down to the 101 area

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3 x 6-week candles bodies printing 2-sigmas from the mean on the Bollinger Band. Madness. This keeps up you'll be paying $50 for a burger at MacDonalds before the end of the year.

If you flip over to the 3-month chart the index prints a full body outside the band not seen since April 2015, 1973 was the last event.

History books will be written about these times we're living through.

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At resistance from the above parabolic curve. A lot of confluence with support and resistance. Yet there's no real signs of momentum weakening, incredible. Let's see how the days ahead until the month end follow through.

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A strong sell signal prints on the DXY 10hr chart with bearish engulfing candle.

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A triple top bearish divergence is now printing on the weekly

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A strong sell signal now prints on the 10-day chart

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Gravestone DOJI prints on the 2-day chart (red circles).

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** most bearish bearish divergence ever **

What do I mean? 11 oscillators are currently printing bearish divergence with price action on the weekly chart. This has never happened throughout the entire history of the dollar index. That's quite a statement.

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2-week chart prints a shooting star candle with the addition if RSI confirming support is now resistance.

There's something else interesting... but will say elsewhere.

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About time... dollar crashing harder than expected, however. Don't know what this means. The *rate* of this fall following a strong signal has not been seen since June 1985. We're entering very weird times ahead...

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Dollar confirms bear flag breakdown, 10% correction to follow back to channel bottom, which itself is a much larger bear flag.