Market Minds

I recently highlighted the “ Bull Flag Formation in the US Dollar Index ” on January 18th (see prior post), and now that we have successfully broken higher confirming the bull flag, it’s time to take an updated view of the daily US Dollar Index chart to take a look at a “bump in the road” that must be overcome to complete the full target. Let’s see that now. Taking a compressed view, we also see the lengthy positive momentum divergence that preceded the sharp (expected) rally in the Dollar Index. A bull flag has formed, and was triggered with an aggressive entry as price tested the 50 day EMA in mid-January (also the lower Bollinger Band) while forming a doji candle. The conservative entry was triggered when price broke sharply above the descending upper trendline three days later. For those who are taking this trade, I wanted to call your attention to the overhead resistance that is currently blocking the advance - which comes in at hte descending 200 day simple moving average (currently at $78.62) along with the upper Bollinger Band ($78.69). Buyers will need to keep pressing through this confluence resistance level to meet the pure price ‘flag’ target near $80.50… which is a strong possibility if price can move solidly above $79 this or next week. Otherwise, we could see a potential turn-around here at the confluence level

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Update on the Daily US Dollar Bull Flag: Bump in the Road