Free Trial

INDEX: TECHS: Monitoring A Reversal Pattern


Is the USD Index (DXY) about to reverse direction?

  • Price action since Jul 31 highlights a potential reversal pattern, an inverted head and shoulders (H&S). This suggests bearish sentiment has weakened since early August.
  • A break of the neckline would confirm the pattern and a reversal.
  • A bear channel is also evident. The top would be the first objective.
  • A break of the channel top would signal a much stronger reversal.
  • Note, momentum as highlighted by the 14-day RSI is rising. This suggests a break higher would likely have momentum behind it, reinforcing a bullish condition.
  • A failure to confirm a reversal means the downtrend remains intact.
  • Key resistance levels to watch:
    • 93.60 - H&S neckline and first reversal confirmation.
    • 94.94 - Bear channel top drawn off the Mar 23 high.

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.