by Johan Kriek (jkriek@fxinstructor.com)

It seems the Dollar Index is now forming a falling wedge pattern

Falling wedges normally break out to the upside.

Have a look at the breakout of the EUR/GBP’s falling wedge that broke to the upside the other day:

Falling wedges are pretty significant and I regard them very highly. To deem any pattern significant, you need at least two highs forming the upper resistance line and you need at least two lows forming the lower line. Look at the figure below:

Now, here is the falling wedge I see on the Dollar Index:

First of all, price has bounced on 76.00 which is a huge support.

If 76.00 holds, we can see the wedge pattern break out to the upside and of course, force the Bucky to strengthen across the board

Enjoy the rest of your NY Session and see you in the Trading Room in the Asian session

Johan