DXY - Possible megaphone topping pattern
The US Dollar Index broke out of its range last week.
At the first look it is a great buying opportunity as we run to new highs.
Normally this kind of breakout would be a buying opportunity. My problem here that we are too late in this intermediate cycle to have a follow through after this breakout.
There is a decent chance that banks used this breakout last week to get out of dollar long positions and next week the smaller players will be left alone with their dollar longs...
The megaphone pattern is always showing uncertainity and chaos. In these patterns every new high and breakout usually a false signal.
If I'm right and this is a topping pattern next week instead of running higher price will drop back into the megaphone and we will have a steep decline to the lower trendline in the following few weeks.
MACD and TSI is signaling divergencies.
If price is reversing early next week I will immediately enter with shorts here.
At the first look it is a great buying opportunity as we run to new highs.
Normally this kind of breakout would be a buying opportunity. My problem here that we are too late in this intermediate cycle to have a follow through after this breakout.
There is a decent chance that banks used this breakout last week to get out of dollar long positions and next week the smaller players will be left alone with their dollar longs...
The megaphone pattern is always showing uncertainity and chaos. In these patterns every new high and breakout usually a false signal.
If I'm right and this is a topping pattern next week instead of running higher price will drop back into the megaphone and we will have a steep decline to the lower trendline in the following few weeks.
MACD and TSI is signaling divergencies.
If price is reversing early next week I will immediately enter with shorts here.
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