The US Dollar, Part 2

Today, I am looking at the DX (US$ Index) from the technical perspective.

Figure 1 is a Monthly chart (Nearest Futures Month) of the DX (US$ Index). My preferred view is the DX is in process of completing either:

1. A 4-wave continuation triangle or
2. A 5-wave change in trend triangle.

If (1) is correct then Figure 2 shows there are three ideal zone terminations:

•  80.16 to 80.46
• 81.71 to 82.62
• 83.53 to 83.88

Figure 2 also shows that we are a potential failure zone. The 290-Minute chart in Figure 3 shows the strong momentum up (shaded rectangle). Note that the price action for Jan 21 shows a neutral bar at a sell zone (Figure 4). Normally I would be looking to sell the DX given the potential Negative Development sell pattern. But given the strong momentum, I rate the possible failure at these levels as a low probability event.

FIGURE 1 DX Monthly

FIGURE 2 DX Weekly

FIGURE 3 DX 290-Minute

FIGURE 4 DX Dailyt