🌎 30+ NEW AI-picked stock strategies for exciting international marketsUnlock Global AI Picks

US Dollar Breaks Out Of Bullish Formation

Published 05/28/2012, 01:59 AM
Updated 07/09/2023, 06:31 AM
BIG
0.87%

At the beginning of May, we identified the potential development of a bullish consolidation formation for the US dollar index that would favor the resumption of the rally from August 2011. The consolidation formation developed as expected and the index closed well above the previous rally high this week, signaling the highly likely resumption of the uptrend.

USD CHART
In general, breakouts have a tendency to test the new congestion support that forms at the top of the previous formation, so it would not be unusual for the index to return to the 81.50 area before moving substantially higher. However, a successful test of congestion support at 81.50 would almost certainly be followed by substantial, additional gains.

USD CHART 2
From a big picture perspective, the advance off of the last long-term cycle low (LTCL) that we identified in September continues to gain strength and a subsequent return to the previous long-term cycle high (LTCH) near 88 would suggest that cycle translation is in question.
USD CHART 3
The US dollar continues to experience violent swings higher and lower as the structural conflict between deflation and inflation rages on.

Considering the unprecedented liquidity operation that the Federal Reserve continues to engage in, it will be interesting to see how far and long the current rally is able to proceed. As always, judiciously applied chart analysis will enable us to identify the key market developments as they occur. We will identify the key developments as they occur in our daily market forecasts and signal notifications.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

Which stock should you buy in your very next trade?

AI computing powers are changing the stock market. Investing.com's ProPicks AI includes 6 winning stock portfolios chosen by our advanced AI. In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. Which stock will be the next to soar?

Unlock ProPicks AI

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.