This Great Graphic depicts what appears to be a head and shoulders top in the hourly bar chart of the Dollar Index. The neckline is found near 96.00 and rotating the pattern along it produces a measuring objective near 95.00.
The bearish pattern was formed in the last few days, and the Dollar Index was resting near the neckline before Trump’s comments gave it the push. The low today is near 95.45, which corresponds to the 20-day moving average. It has not closed below this moving average this month. After falling late yesterday and into the Asian session earlier today, the Dollar Index has been moving back and forth in a little more than a 20-tick range (95.40-95.60).
The risk is that stale longs will look at a further recovery as an opportunity to move to the sidelines, with the 95.80-96.00 likely capping the upside. The daily technical indicators are still warning that the downside correction is not over. A break of 95.00 could spur a move toward 94.00.
