The US Dollar Basket has moved lower on the 60-minute chart as the Dow Jones is still weak but has significantly pared back the losses seen earlier in Tuesday’s trading session. The Dow’s mid-morning recovery has slowed the pace of US Dollar buying. The current negative sentiment on the US Dollar has resulted in a reversal on the 60-minute time frame however there is still sufficient support to possibly entice bulls back into the Dollar despite the uptrend line break at 87.12.
The alert on the 60-minute chart of the US Dollar Basket is a short-term Flag pattern. The main factors that distinguish a Flag from a Channel pattern are the length and market direction. While Channels are ideally trending patterns, Flags can occur in both trending and non-trending markets. Channels are also longer patterns while Flags are typically shorter.
This Flag pattern took just 30 candles to form meaning it represents the sentiment of one day. The Initial Trend shows that the sentiment was very bullish and that this pattern is occurring in a strong uptrend. The Flag reversal is somewhat surprising and despite the strong Breakout momentum that accompanied the move lower through uptrend line support, follow-through may be short lived. In fact, look to Autochartist’s Forecast support between 86.69 and 86.20 to hold prices despite the Dow Jones’ efforts to close strongly back above 10000.
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