The U.S. dollar may be ready for a bullish run after seeing a downtrend earlier this month.
Think the Greenback is ready for an upswing?
Check out the 4-hour chart’s reversal pattern!
U.S. Dollar Index (DXY): 4-hour
U.S. Dollar Index (DXY) 4-hour Forex Chart by TV
After days of retesting April and June’s lows, the U.S. dollar may be getting ready for a bullish run.
And why not? Weak growth readings from some of the major economies and the PBOC’s surprise interest rate cut are highlighting the Fed’s relatively less dovish stance and the dollar’s safe haven status.
Higher U.S. bond yields and U.S. equity prices may also draw in bullish demand and push the U.S. dollar higher.
But are they enough to push the currency index higher?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!As you can see, USDX is sporting a potential Inverse Head and Shoulder pattern in the 4-hour time frame after a strong downswing starting in late June.
Bullish candlesticks and consistent trading above the 104.40 “neckline” open the index to a move back up to the 105.00 psychological handle if not the 106.00 June highs.
On the other hand, dollar bears may just be taking a break and would soon price in the Fed’s future interest rate cut/s.
If USDX finds resistance from the pattern’s “neckline” and trades lower, then the dollar may dip back to the 103.80 July lows or even drop to the 103.00 – 103.50 March inflection point.
Good luck and good trading this pattern!
If you’re not familiar with the DXY, check out our lesson, What is the US Dollar Index?