Dollar Caps Longest Run of the Year Just After Notching a Breakout

Talking Points:

  • The DXY capped a six-day run – the longest in 2018 – and stalled immediately after a technical break
  • EURUSD may have cleared its ‘right shoulder’ and USDJPY resistance, but range pressure remains
  • Download our recently released fourth quarter forecast for the Dollar and majors here

Technical Forecast for US Dollar: Bearish

The impressive reversal of fortune for the Dollar these past weeks – from a tentative bearish reversal break to clearing range resistance – has once again showed signs of flagging momentum before any serious commitment to trend has been made. When the DXY was pressuring 94 as a three-month support carving out the ‘neckline’ on a prominent head-and-shoulders pattern, the potential for genuine reversal looked suspect. Aside from the fact that few of the Dollar-based majors offered up the same sense of imminent charge as the index and perhaps EURUSD, the general market environment simply reflected little of the conviction normally associated with trending markets. It is possible for a single currency or asset to ‘go it on its own’, but that is typically the exception to the rule and thereby a low probability. Successful trading rarely involves chasing low

Article source: https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2018/10/05/Dollar-Caps-Longest-Run-of-the-Year-Just-After-a-Notching-a-Breakout.html