DXY Target Setting
We have two patterns that are playing together for DXY, first the purple consolidation/bottoming formation which performed beautifully, as shown by the dotted purple line, and that set up a diamond top. I have stated elsewhere that I think the right side of that diamond has a bit too much white space as it doesn't tough resistance as much as I would like.
SO, if we base our target on the hiht of the purple flag pole from break out we get a target of about 115. If we take the slightly lower target of the light blue diamond hight we get the 113 target.
The orange channel defines the price action for the last year and we have what would normally be a candle that signals the development of a reversal pattern but as we are finally hopping on top of our channel I suspect we will move to our targets rather quickly.
The chart below has some optimized settings for moving averages and MACD, with bollingerbands on the Signal lime and the histogram separate for charting purposes. This system is pretty simple.... breaks of the Signal of the bollinger band base line is a powerful entry signal. We have price action on top of the 13 and 48 EMAs. With this system we are looking to close with bearish divergence on the MACD histogram and convergence of the signal to baseline. Price action popping out the top of the bollinger band suggest we will are in a very powerful move and when it quits we will be roughly sideways or down for quite some time. This is quite the wide range but if you are looking for volatility you could find it elsewhere. These indicators back up my long bias of DXY and suggest this will run nicely.
We should have a very bullish 8-12 months for the dollar which will be very destructive for emerging markets and will play into a lot of complex decisions vis-a-vis international trade, trade wars, and the price of equities, precious metals and so forth. I think we are going to enter a very unique situation where both gold and USD are going to appreciate agaist everything else, and that is an interesting economic situation to be in for international trade. There are a lot of people with a lot more formal education and they seem near close to blows when discussing the future of the dollar verses everything else. I think we have run out of repatriations after the tax holiday that were fueling stock buybacks and so US equities don't have much higher to go. With everything we have thrown at the US stock market the S&P is up 5.3% from 2016. I am not impressed.
SO, if we base our target on the hiht of the purple flag pole from break out we get a target of about 115. If we take the slightly lower target of the light blue diamond hight we get the 113 target.
The orange channel defines the price action for the last year and we have what would normally be a candle that signals the development of a reversal pattern but as we are finally hopping on top of our channel I suspect we will move to our targets rather quickly.
The chart below has some optimized settings for moving averages and MACD, with bollingerbands on the Signal lime and the histogram separate for charting purposes. This system is pretty simple.... breaks of the Signal of the bollinger band base line is a powerful entry signal. We have price action on top of the 13 and 48 EMAs. With this system we are looking to close with bearish divergence on the MACD histogram and convergence of the signal to baseline. Price action popping out the top of the bollinger band suggest we will are in a very powerful move and when it quits we will be roughly sideways or down for quite some time. This is quite the wide range but if you are looking for volatility you could find it elsewhere. These indicators back up my long bias of DXY and suggest this will run nicely.
We should have a very bullish 8-12 months for the dollar which will be very destructive for emerging markets and will play into a lot of complex decisions vis-a-vis international trade, trade wars, and the price of equities, precious metals and so forth. I think we are going to enter a very unique situation where both gold and USD are going to appreciate agaist everything else, and that is an interesting economic situation to be in for international trade. There are a lot of people with a lot more formal education and they seem near close to blows when discussing the future of the dollar verses everything else. I think we have run out of repatriations after the tax holiday that were fueling stock buybacks and so US equities don't have much higher to go. With everything we have thrown at the US stock market the S&P is up 5.3% from 2016. I am not impressed.
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