USD Is Not Willing To Take A BreakIn the middle of the week, I think we can already state that the main topic on the Forex market is the reversal on the American Dollar. Dollar bears tried their chances yesterday but the USD weakness was contained very efficiently. In few cases, that allowed to create sweet reversal patterns.
One of those can be find on the Dollar Index – DXY. Bullish setup here is really handsome. It all starts with the inverse head and shoulders on the daily chart. Upswing from the last Friday, allowed the price to break the neckline of this formation, along with the major down trendline. Yesterday’s candle is a beautiful hammer and shows us a successful test of those resistances as closest supports. Chances for a further rise are quite significant.
Stronger USD, usually means weaker Gold. Its not different this time too. Gold is still correcting the upswing that happened after the death of the Iran General. Most recent technical development is a breakout of the lower line of the small flag formation, which shows us, that most probably, the downswing will be continued.
The last instrument is a bit exotic but recently, super technical. On the AUDCHF we can spot three nice technical patterns in a row. First one is a giant symmetric triangle, second one is a medium flag and the third one is a tiny pennant. All those patterns ended with a bearish breakout and a drop. As long as we stay below the 0.669, the sentiment is negative.
This article is written by Tomasz Wisniewski, Director of Research and Education at Axiory