Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

US Dollar Set For Massive Smackdown 

Currencies / US Dollar Jul 31, 2016 - 08:21 AM GMT

By: Austin_Galt

Currencies The US Dollar Index price action has played out exactly as forecast in recent subscriber analysis. That analysis reduced the price expectation for the bear rally and the recent high of 97.62 was a bingo hit.

Let’s review the technicals beginning with the daily chart.


US DOLLAR INDEX DAILY CHART



Previous analysis forecast this bear rally to clip the 61.8% Fibonacci retracement level of 97.26. Nice.

Previous analysis also forecast this bear rally to top out around resistance from the 76.4% angle. Nice again.

Price is now back down near the 61.8% angle and I expect some very temporary support to come in shortly and lead to a weak little rally. This rally should provide bears one last opportunity to get short before a big whoosh south commences.

The Bollinger Bands show price is back at the lower band and any subsequent rally will struggle to get back to the middle band in my opinion.

The RSI is looking very weak while the MACD indicator has just made a bearish crossover.

Let’s move onto the monthly chart.

US DOLLAR INDEX MONTHLY CHART



Previous analysis forecast this bear rally to top out around resistance from the 23.6% Fibonacci Fan angle and that is exactly what has occurred. I favour the final bear market low to be down at least at the 76.4% angle and possibly even the 88.6% angle.

The projection for pullback low remains unchanged being between the 76.4% Fibonacci retracement level at 77.83 and the 88.6% level at 74.20.

The Bollinger Bands show the middle band providing resistance as expected and laid out in previous analysis.

The RSI is weak while the MACD indicator is bearish.

Let’s wrap up the analysis by reacquainting ourselves of the even bigger picture using the quarterly chart.

US DOLLAR INDEX QUARTERLY CHART



I have shown this chart before and it lays out my expectation of a massive 5 point broadening low in process with points 1 to 3 already in place. Price is now on its way to a point 4 high but I expect some volatile price action before that then.

The Bollinger Bands show price has left the upper band and next stop appears to be the middle band with the final low, a higher low, to be around support from the middle band.

I have drawn a Fibonacci Fan from the 2001 high to 2008 low. Price has recently been flirting above the 76.4% angle but I believe this a false dawn and price is set to break below and then get smashed down to the 61.8% angle to set up the higher low.

I expect this quarterly candle to form a bearish outside reversal candle which means price will have to take out the previous quarter’s low of 91.88

The RSI shows a bearish divergence while a bearish crossover in the MACD indicator looks imminent.

Summing up, I expect price to get absolutely creamed over the next 12 months or so with the bears set for a big feast!

By Austin Galt

www.thevoodooanalyst.com 

Austin Galt is The Voodoo Analyst. I have studied charts for over 20 years and am currently a private trader. Several years ago I worked as a licensed advisor with a well known Australian stock broker. While there was an abundance of fundamental analysts, there seemed to be a dearth of technical analysts. My aim here is to provide my view of technical analysis that is both intriguing and misunderstood by many. I like to refer to it as the black magic of stock market analysis.

Email - info@thevoodooanalyst.com 

My website is www.thevoodooanalyst.com 

© 2016 Copyright  The Voodoo Analyst - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Austin Galt Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in