Chart patters suggest further USD selling ahead
The June 10 recovery off daily support at 95.84, as you can see, established a reasonably compact bear flag between 95.72/97.45. Last week kicked off slipping below the aforesaid flag’s lower boundary, introducing a sell signal and projecting moves as far south as 92.72 (take-profit target measured by calculating the preceding move and adding the value to the breakout point – purple).
In addition to the above, as featured in recent weekly reports, late May witnessed a push through the lower limit of a large bearish pennant configuration (98.27). Traders familiar with this pattern, therefore, may still acknowledge the possibility of moves forming as low as 93.97: the pennant take-profit target, measured by calculating the distance of the preceding move and adding the value to the breakout point (yellow).
Also referred to as half-mast formations, flags and pennants are considered continuation patterns, estimating the US dollar index, or DXY, may extend downside over the coming weeks.
In addition to the above, as featured in recent weekly reports, late May witnessed a push through the lower limit of a large bearish pennant configuration (98.27). Traders familiar with this pattern, therefore, may still acknowledge the possibility of moves forming as low as 93.97: the pennant take-profit target, measured by calculating the distance of the preceding move and adding the value to the breakout point (yellow).
Also referred to as half-mast formations, flags and pennants are considered continuation patterns, estimating the US dollar index, or DXY, may extend downside over the coming weeks.