US Dollar Index forecast for the week of January 21, 2013, Technical Analysis

The US Dollar Index had a slightly positive week over the last five sessions, but more importantly managed to break above the 80 handle which was a short-term resistance area. If you look at the overall shape of the chart, we have a slightly up trending support line that could also be read as a potential next for a head and shoulders pattern.

Because of this, we have to assume at first that this trend line will continue and that buying is probably the only route to go at this point time. However, it looks awfully congested in this general vicinity to do so. On the other hand, this does show that if we get a significant break to the downside, this could be a 500 points move in the making based upon the height of this potential pattern.

 

US Dollar Index forecast for the week of January 21, 2013, Technical Analysis
US Dollar Index forecast for the week of January 21, 2013, Technical Analysis

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