Reverse Head and Shoulder on Dollar Index

A potential bullish inverse ‘’Head and Shoulder’’ seems to be forming in Dollar Index. A breach above neckline at 83.50 would indicate a breakout pushing prices higher towards 86. The Bullish view in Dollar index is reinforced by the topping Reiki cycle on EUR and GBP, bottoming JPY Rieki cycle and completing price structures in AUD, CAD and CHF.
With Rieki turning, EUR USD failed to breach past 1.29. However the pair is still holding above the 50% retracement. A breach at respective levels below 1.2580 would push prices lower towards 1.23. On the alternate (low probability scenario) side,  if 1.2925 is breached, prices could push higher towards 1.33 and beyond.
GBP continued to hold above 38.2% retracement support at 1.5350. A breach below 1.53 would push prices lower towards 1.49. A breach above 1.57 however would negate the bearish view. While the Reiki on JPY continues to point higher, the pair made a new low. We are looking at a completing structure and after a minor new low expect the pair to head towards 88.
CAD and AUD continued to strengthen. AUD has made a new high indicating the complex corrective is still ongoing. However the intermediate trend continues to points to weakness for the respective currencies. CHF bottomed as it has breached the small falling channel. The pair should head towards 1.07
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Jyoti Nangrani, CMT (Chartered Market Technician) from the Market Technicians Association. She has 5 years of experience in Technical Analysis covering Equity and Commodity markets. She holds a Masters diploma in E-Business and is currently pursuing the MS Finance from ICFAI, Hyderabad. She is a Technical Analyst at Finquest Securities Pvt Ltd on the Institutional Desk. She worked as a part of the core strategy team at Tower Capital devising CRM and MIS systems for Debt/Equity and Commodity divisions. She is passionate about Technical Analysis and considers it an extremely valuable skill in current times. Jyoti covers Forex in her weekly columns.
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