Open trading account 
Through the entire year I've been preaching that soon we may see developing the broad based US dollar bullish trend and it may be the case that the Dollar has already started shifting direction. But at the same time we need more time for this bullish US dollar sentiment to gain traction and have a well constructed trending market.
For more reference you can check out my previous take on US Dollar here: The Case for a Multi-Year USD Bullish Trend. and here: The Case for a Multi-Year USD Bullish Trend.
In this blog post I want to address the recent price structure of Dollar Index and the broad base Dollar sentiment. Figure 1 represent the daily US Dollar index chart where we can see the DXY breaking out of an 10 months ranging market. however as we don't have a clear breakout there is a possibility to see a retracement back inside the range zone (see 2nd scenario) before continue to the upside.
This second scenario is supported by the current equity correction and still US lower yields so we have a strong case to expect a pullback. However we should treat this retracement us corrective move and which can be an opportunity to buy the dollar again.
But if we look over the divergence between US economy and G10 countries, US economy has outperformed the rest of the world due to strong growth in Q2 GDP, inflation and interest rate differential, so this can further fuel the USD momentum as this divergence may not be full priced in.I think It's a matter of whether we break up above 81.70 an continue the recent bull run or we break below 81.30 and retest the lower end of current upward channel.
On the weekly chart (see Figure 2)we can spot a fractal that support our current view on the Dollar Index. Fractals are typically self-similar patterns and they may be exactly the same at every scale, or they may be nearly the same at different scales.
Best Regards,
Daytrader21
For more reference you can check out my previous take on US Dollar here: The Case for a Multi-Year USD Bullish Trend. and here: The Case for a Multi-Year USD Bullish Trend.
In this blog post I want to address the recent price structure of Dollar Index and the broad base Dollar sentiment. Figure 1 represent the daily US Dollar index chart where we can see the DXY breaking out of an 10 months ranging market. however as we don't have a clear breakout there is a possibility to see a retracement back inside the range zone (see 2nd scenario) before continue to the upside.
Figure 1. US Dollar Index Daily Chart
This second scenario is supported by the current equity correction and still US lower yields so we have a strong case to expect a pullback. However we should treat this retracement us corrective move and which can be an opportunity to buy the dollar again.
But if we look over the divergence between US economy and G10 countries, US economy has outperformed the rest of the world due to strong growth in Q2 GDP, inflation and interest rate differential, so this can further fuel the USD momentum as this divergence may not be full priced in.I think It's a matter of whether we break up above 81.70 an continue the recent bull run or we break below 81.30 and retest the lower end of current upward channel.
Figure 2. US Dollar Index Weekly Chart.
On the weekly chart (see Figure 2)we can spot a fractal that support our current view on the Dollar Index. Fractals are typically self-similar patterns and they may be exactly the same at every scale, or they may be nearly the same at different scales.
Best Regards,
Daytrader21
