USD just Gave UpThanks to the dovish FED, we do have a very negative situation on the American Dollar.
End of June brings us a major sell signal on the global reserve currency. For the past few months, Dollar Index was trying to break the horizontal resistance on the 97.7. After another failed attempt (at the end of May), buyers gave up and the price fell down like a rock. DXY created a triple top formation, which made situation even worse. Decisive blow happened on Friday, when the price broke the long-term up trendline (blue). Current target is the area around 94.9 and chances that we will get there are pretty high.
Situation on the USDCHF is even worse and here the downswing started at the end of April, not May. USDCHF is under the influence of a big head and shoulders pattern (yellow). Supply broke the neckline on the 20th of June and since then, we do have a proper sell signal. A bit earlier, price broke the major up trendline and later used that as a resistance, which only increases bearish chances.
Last instrument is the USDJPY, which broke the lower line of the symmetric triangle pattern. That breakout is a proper signal to go short and is a long-term one! Before breaking that crucial support, the price created a small flag, which was a good bearish indicator. Current target are the lows from the beginning of the year and price action is suggesting that we should get there soon.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis