The US Dollar Index continues holding a precarious position above major support, with the latest price action developing into a well organized Inverse Head & Shoulders pattern, illustrated here on the Autochartist 240-minute time interval.
This pattern has been developing for a significant period, now measuring 53 bars in duration and still in the process of completing the right-hand shoulder of the formation. With a continuation of the present sideways trading, the current support near 77.60 is anticipated to hold the market for a possible retest of the resistance provided at 78.34
Alternatively, a breach of the 77.60 support would indicate a breakout from the Inverse Head & Shoulders chart pattern. If this occurs there is very little downside support for the Dollar Index futures below that price level. With a breakout initiated, momentum selling could be swift and steep, with a forecast price target at a much lower trading range.
If this pattern does fail to the downside, the longer term technicals portend a possible resumption of the Dollar bear market, with an outside chance of new lows to occur.
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