Recent Trendlines For The U.S. Dollar Index
Corey Rosenbloom: Here’s a quick update regarding the conflicting trendlines for the US Dollar Index along with a weekly trendline which may be standing in the way of a daily “Broadening Formation” pattern that’s been developing.
Let’s take a look at these chart structures and the key levels to watch going forward.
We’ll start with a quick Daily Chart view of the Broadening Formation already in motion:
I’ve been highlighting the Broadening Formation to Weekly Intermarket Members and so far, the pattern has held up nicely.
Simply, if the pattern continues, the next swing would be expected to break support at 81 and travel lower toward the trendline intersecting the 79.50 level.
Note the pattern midpoint or ‘value area’ into 82.50 which represented August’s swing high.
Before we assume that the Dollar will simply continue this pattern and trade to the lower level, let’s see the simple picture – and a competing trendline – on the Weekly Chart:
Based on the Weekly Chart, it would seem that the next swing for the US Dollar would simply be a strong rally back to the upside toward the 85 level or higher to continue the uptrend in motion.
It’s the competition between short-term Dollar bears and longer-term Dollar bulls that will determine the next tradable swing for the index.