Monday, December 14, 2015

Chartology: The US Dollar Index Is Ready For Its Next Move

We don't post on foreign currencies very often, the moves are just too quick for a platform like blogging, but in the case of the larger picture the uptrend for the dollar has farther to go, maybe a year maybe 18 months.
DXY 97.63 up 0.06.

From See It Market:
We last wrote about the US Dollar Index and its popular Power Shares ETF in late October. In that post, we suggested that traders might look for a “base hits” approach to take advantage of medium-sized swings before the larger upward trend reasserts itself. 
At that time, the U.S. Dollar Bullish ETF (symbol UUP) had tested support in what we were treating as the first part of a corrective pattern. Thus, we were expecting a substantial bounce but not a skyrocketing move. 
Our previous chart showed resistance levels for the expected bounce at 25.75 and 26.10. Last week, price tested the upper of those two levels. It may be time for medium-term traders to take profits from any long positions. Traders working on fast time frames might consider looking for opportunities to short the US Dollar Index or ETF (or simply go long the Euro). 
If the Elliott wave count is correct, then it should not be possible for UUP to fall a great deal farther than what we have shown with the path sketched on the chart below. Specifically, price should not breach the 2012 high labeled as wave (i). We’re not expecting a US Dollar Index “crash” – just a resumption of the sideways/downward correction.
us dollar index correction price targets etf uup january 2016
A likely price target area for a downward move on the US Dollar ETF (UUP) is between 24.15 and 24.50, with the center line of the channel offering further support in that region....

We do not recommend ETF's/ETN's for currencies or commodities, preferring futures or options, but for tracking purposes the UUP is trading at $25.37 Up 0.02.