Yesterday it looked like DXY has broken down from the channel (bear flag on the daily chart). Today until the middle of the day it seemed we are going to have the perfect back test of the channel. But in the last couple of hours price has broken back into the channel again...
I'm looking at this rally and break back into the channel as a very bullish sign. Price is going to test the channel's upper trendline in the following days.
We are still building the giant H&S pattern on the weekly chart and for that we need to tag at least the weekly 10 EMA . The weekly 10 EMA is at 94,46 it's exactly the upper trendline of the channel.
These kind of false breakdowns easily can turn out to be great rallies. As a lot of players were anticipating the bear flag breakdown and it was only a false breakdown we might see a short squeeze and a breakout from the top of the channel. In that case we easily can test back the last breakdown levels between 95,5 and 96,5 and the 20 EMA on the weekly chart...
So I make the call DXY will be 94,5-94,6 very soon (in a week) .
I'm looking at this rally and break back into the channel as a very bullish sign. Price is going to test the channel's upper trendline in the following days.
We are still building the giant H&S pattern on the weekly chart and for that we need to tag at least the weekly 10 EMA . The weekly 10 EMA is at 94,46 it's exactly the upper trendline of the channel.
These kind of false breakdowns easily can turn out to be great rallies. As a lot of players were anticipating the bear flag breakdown and it was only a false breakdown we might see a short squeeze and a breakout from the top of the channel. In that case we easily can test back the last breakdown levels between 95,5 and 96,5 and the 20 EMA on the weekly chart...
So I make the call DXY will be 94,5-94,6 very soon (in a week) .
