A follow up on last week post on USDX: Dollar Challenging Previous Highs and Near Term Weakness Seen
We mentioned that the Dollar Index may face a possible resistance, and it was shown on the Daily chart by the Bearish Engulfing Candlestick pattern.
Daily Chart of Dollar Index
This was also confirmed in the lower timeframe on the 4 hourly chart.
4 Hourly Chart of Dollar Index
As seen from 4 hourly chart, a Head and Shoulders chart pattern has just completed. In addition, the current Price Action attempts to to test the neckline, which is likely to be an opportunity for late Bears.
However, this bearish reversal may be invalidated if Price will break above the neckline, testing the top of the Right Shoulder.
Thus, in the near term USDX may find support on the weekly trendline (Green) if the Bulls are aggressive to continue their rally, otherwise, the next monthly support (Red) should be strong to hold its bullish fort.
