Dollar Trendline, Reverse Head & Shoulders Pattern

The dollar recently made two bullish formations on the 6 month chart and may be confirming the recent market reversal. This comes on news of a weak Euro due to concerns of an Irish bailout and talk of solvency issues in Portugal.

The first bullish indicator is the breaking of the former downward trendline. This normally wouldn’t be enough to confirm anything but in recent weeks it appears that we’ve formed a reverse head and shoulders pattern as well. The breakout through the price channel makes this a very strong indicator in my opinion.

Subtracting the lowpoint of the head (75.63) from the highpoint of the neck (79.45) gives us 3.82, which we can add to the highpoint of the neck. That gives us 83.27 as our next price target, and ironically enough, 83.27 has acted as a resistance level more than once in the past year which adds to this chart’s credibility.

About Aaron Basile
Day Trading and Swing Trading Ideas, Certified Personal Trainer, Power Bodybuilding, Avid Sports Fan (NBA, NFL)

One Response to Dollar Trendline, Reverse Head & Shoulders Pattern

  1. Pingback: Half Day, Dollar Up, Chinese Margin Hike, Monthly Volume « Aaron Basile

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: