DXY Wedge Pattern
Finally had some time to put in some charting time! For those that don't see my charts very often, I like to add in ellipses to show where I draw my Fib tools.
My idea for DXY is that it will complete the full extension in Red. This lines right up with the 50% Fib retracement in Black. The 1.236 Red FE lines up with the Fib Retracement 61.8% and I set up a zone in green that I expect DXY to reject off of. I see several areas of confluence. It appears there is a descending wedge and generally when this pattern forms you see a quick dip down and then price action will continue bullish. This lines up with my theory if we break the wedge down and hit the full extension then we should see a move to the up side. We should see it meet the full extension in Blue in the 110.00 area.
I also see that if this idea comes to life, we could see bullish divergence on the daily with RSI. Basically I'm speculating from the start of this bullish sequence where the blue and black ellipses are and the pink ellipses on the RSI indicator that we could see the divergence based off of those points.
With this in mind we could very well see EU hit parity and USD base pairs rally. This is something that I will be keeping in mind if I choose to trade USD pairs.
My idea for DXY is that it will complete the full extension in Red. This lines right up with the 50% Fib retracement in Black. The 1.236 Red FE lines up with the Fib Retracement 61.8% and I set up a zone in green that I expect DXY to reject off of. I see several areas of confluence. It appears there is a descending wedge and generally when this pattern forms you see a quick dip down and then price action will continue bullish. This lines up with my theory if we break the wedge down and hit the full extension then we should see a move to the up side. We should see it meet the full extension in Blue in the 110.00 area.
I also see that if this idea comes to life, we could see bullish divergence on the daily with RSI. Basically I'm speculating from the start of this bullish sequence where the blue and black ellipses are and the pink ellipses on the RSI indicator that we could see the divergence based off of those points.
With this in mind we could very well see EU hit parity and USD base pairs rally. This is something that I will be keeping in mind if I choose to trade USD pairs.
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