Harmon: 3 Reasons To Buy The US Dollar
The US Dollar had a a long run higher that got a lot of attention the last half of 2014. But then it just seemed to fall asleep. That is until the world monetary and currency markets gave it a kick in the butt and sent it higher in October. It peaked out at the end of November in what many though would be a double top, right at the March high. So heading into the week where Mario Draghi and Janet Yellen were both speaking it was falling.
The fall ended at a higher low and the FOMC decision seems to have given it renewed strength. But will it go higher from here? The technicals are lining up to say yes. There are 3 things to focus on in this chart of the US Dollar Index.
First is the long descending triangle with support at 93.25. The Dollar Index broke above this triangle to start November and set up a target on that pattern break to 104. The second is from how that early December pullback formed. The reversal back higher this week creates an AB=CD pattern. And the target for that is 103.97. Coincidence? Finally the momentum indicators are flashing bullish. The RSI at the top held the bullish zone on the pullback and is rising again. The MACD at the bottom is about to cross up, a bullish signal.
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