DX Needs a New Low within the Orange Price Channel to Confirm the Channel
US Dollar Index Futures need a new low within the orange price channel to confirm the channel. If the channel confirms, it will be in the critical decision wave for starting a bottom vs. setting up a melt-down to the red megaphone bottom.
Roughly 2/3 to 3/4 of the time, the price would start a channel bottom. That would put a bottom at roughly the red megaphone VWAP–the perfect place to start a new megaphone if the dollar is in a prolonged sideways move.
If instead the dollar breaks the orange price channel top by a little bit then puts in a new low, it will be forming a falling megaphone likely to bottom at the red megaphone VWAP.
The dollar is moving sideways across VWAP of a multi-decade megaphone. It is likely to hang around this level for a looooong time.