Continuation pattern in play
US retail sales ahead
Let's talk about the US Dollar. The US Economy has been adding job at a better than expected rate, unemployment is at 49-year-low and even though the US GDP growth has slowed it's still pretty much growing steadily month over month. The $DXY, on the other hand, has not acted accordingly. Technically speaking on the larger picture we're still pretty much in a bull market but the $DXy has been capped by the 97.70 level.
If we take a look at the shorter picture we can see that the $DXY has also been capped to the downside by the 95.80 level which means that a retest and break of the 97.70 level is still very much in the picture. Now, after testing and failing to break the previous highs, the $DXY has been trading erratically inside a pennant around the 97.00 level which can be considered a continuation pattern, but this pattern will not be completed until it breaks and price trades above the previous swing high (97.20). Until then the US Dollar stays non-directional to us but a break of this pattern could bring enough bull pressure to finally break above the 97.70 level and start a second real bull run of the US Dollar. Tomorrow's Us Retail Sales could be the catalyst for such move.
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