Dollar Index on the rise

This week starts for us with the analysis of the Dollar Index, which in the last week, created a major buy signal and it seems that this positive movement will be continued at the end of the October and the beginning of November too.

DXY is climbing higher since the middle of September. In that time, price managed to create an inverse head and shoulders pattern. On Thursday, we managed to break the neckline of this formation (red) along with the horizontal resistance (yellow). That movement was on Friday confirmed, as the price used that area as a support. The new week starts on the front foot and as long as we are above the yellow area, we do have a buy signal here.

The iH&S formation mentioned above is a part (a right shoulder) of the bigger iH&S pattern made on the Daily/Weekly chart. The second one was started on the July 2017 and we are still too far from the neckline to claim the buy signal from that. It would be nice to keep that at the back of your head though. With that pattern, we can aim much higher, with the tops from 2016 being the next target here.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis