DOLLAR INDEX - IMMINENT BREAKDOWN IN BEARISH LONG TERM TREND by DanV on TradingView.com
31 January 2013
If you have seen some of my other charts and in particular EURUSD chart you will note that I do have overall bullish bias over longer term for EURUSD and correspondingly Bearish view for the Dollar. So much so that EURUSD could very well retest its all time high and Dollar index could plumb to new low. That aside I was alarmed at what I noted in the Dollar index price action over the last 2 days to the extent that whilst we can hope that it will hold the support zone, it is becoming vulnerable for further weakness and is imminent for the following reasons:
(1) It has been consolidating since September Low in what might be possible Wave B triangle, which appears to be complete and new impulsive leg to the downside is in development.
(2) USDJPY is near completing intermediate top and retracement is imminent if not already started. I will show the Snapshot of USDJPY in the Comments below.
(3) USDZAR appears to have topped.
(4) Taking a look at the UUP which shows Volume (Snap below in the comment section) shows that the OBV has already broken down below the support. That the Consolidation has taken place in declining volume and the recent down leg has exhibits above average volume and that the yesterday's decline had the highest volume in the recent time. Whilst this could be exhaustive move but such do not look reasonable in that we are still in the congestion. Except that it is showing extreme weakness. I hope I am wrong but wonder if against all odds Dollar could rally hold up here. If the Dollar Index broke below the support then EURUSD will rocket to levels around 1.38 -1.40 or higher.