The DXY is setting up a bear flag pattern which could take us below support.
The DXY recently came out of an ascending wedge that had developed for the last couple years. Currently, we have a bear flag setting up which points below the 97.00 level. The reason why this is important is some technicians are watching the ascending channel (green lines) that has held the pair for the last 1.5yrs. If that is broken, the risk of a much more prolonged downmove exists towards 95.31. We should note the 200dma has acted as strong support in the last 12 months, also the 161% extension of the last up move comes in at the 96.75 level.
Blake Morrow
