I haven’t posted much on the US dollar lately as I’ve been waiting for the dust to settle, as the price action completed another reversal point in its nearly 2 1/2 year trading range.
Tonight I would like to update some of the charts we’ve been following to see if we can gain any insight into what the US dollar is currently telling us about which way it wants to go. We’ll also look at some other currencies that may shed some light on the direction for the US dollar.
This first daily chart for the US dollar starts at the 2017 top and down to the bottom of the 2 1/2 year trading range.
I’ve been showing you this technique with some of the stock market indexes that are doubling the size of their 2009 uptrend channel. With the US dollar it’s just the opposite, where I used the black rectangles that are exactly the same height, to look for a place to add the bottom rail of the downtrend channel. As you can see there were no touches on the bottom rail until the very bottom of the downtrend channel was hit.
All it really tells us at this point is that we have a parallel downtrend channel in place. What we need now is to see some type of reversal pattern building out to reverse the downtrend that has been in place for almost a year. We have a potential inverse H&S bottom building out, but we need to see the neckline broken to the upside before we have confirmation that the downtrend may be over. It’s close, but not quite there yet.
This post was published at GoldSeek on Thursday, 26 October 2017.
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