Dollar Update

DX is Megaphoning Near the Red Megaphone VWAP

DX is Megaphoning Near the Red Megaphone VWAP

DX has started a megaphone near the red megaphone VWAP, which is the minimum retrace target for this dip.  DX is still likely to make it to the bottom of the blue rising megaphone before this dip is over and could go all the way to the red megaphone bottom.

The most likely scenario is the purple one, where the little pink megaphone keeps megaphoning.  The moves within the megaphone would typically get wilder to put in retests of the 2016 low and the high at the beginning of 2017.

The purple scenario would usually complete as a triangle or diamond continuation pattern.

DX Approaches Critical VWAP Level

DX Megaphone

DX is Approaching its Megaphone VWAP Level at 95

DX is approaching the VWAP level of its blue megaphone at roughly 95.

DX could slice through that level for a crash to the blue megaphone bottom, but it’s much more likely to bog down there and start a new megaphone that keeps the dollar moving sideways for a long time.

If we do get the purple scenario, it will establish the larger pink megaphone and DX will be a strong favorite to go for its top at least one more time.

Dollar Update

DX Put a Falling Wedge Right Shoulder on its Rising Megaphone (Orange) H&S Top (Red Neckline)

DX Put a Falling Wedge Right Shoulder on its Rising Megaphone (Orange) H&S Top (Red Neckline)

DX put a falling wedge right shoulder on the head and shoulders top for its orange rising megaphone—first time I can remember seeing that.

The rising wedge broke out downwards, of course, but it’s a small formation.  That suggests a target closer to the light blue megaphone VWAP than its bottom.

The orange rising megaphone retrace target is its bottom.

DX could go all the way for its light blue megaphone bottom but is a favorite to bog down at VWAP at roughly 95 and start a series of new megaphones inside megaphones there.

The green scenario would suggest a head and shoulders top is forming with a target of roughly 76.  I don’t buy that (I’ll trade it, though, if it happens).

The purple scenario would suggest a triangle continuation pattern is forming between the May 2016 low and January 2017 high.

US Dollar Update

DX is at the VWAP of its Long-Term Megaphone (Red)

DX is at the VWAP of its Long-Term Megaphone (Red)

The dollar is hung up at the VWAP (volume-weighted average price) of a very long-term megaphone that began forming in the late 1980s (red on chart).  It’s also paused just above the breakout point from a falling wedge top connecting the 1985 and 2002 dollar highs.

DX Megaphone (Purple) vs Triangle (Green) Scenario

DX Megaphone (Purple) vs Triangle (Green) Scenario

DX got to its recent high within the red rising megaphone on the second chart.  That high pierced the formation top before reentering and would usually make a new high within the formation before breaking out of it.

Then DX must return to at least the base of the rising megaphone at roughly 93.

It could get there by returning to the blue megaphone VWAP at roughly 95 and starting a new megaphone there (green scenario).  The green scenario could produce a series of new megaphones inside megaphones across 95 to form a big continuation triangle before the dollar continues up to the top of its long-term red megaphone.

But it’s more likely that the dollar will continue through 95 to the bottom of its blue megaphone to form the larger orange megaphone.