The “Power of the Pattern” has been reflecting that a “bullish cup and handle pattern could be playing out in the U.S. Dollar” (see post here),
Yesterday’s rally broke the top of the handle, where did the Dollar end up in respect to this key pattern?
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The rally took the Dollar back to where its been twice before, which happens to be the top of the cup pattern. The “cup & handle” pattern is a bullish pattern on the dollar, to prove this pattern is in place the Dollar has to break above line (1)…which at this time it has NOT!
The CRX continues to reflect a series of lower highs along line (2) and at this time is much closer to the top of the channel as the Dollar tests resistance. The Dollar is “Not Their Yet” per a breakout… should that take place, the CRX could fall to the bottom of the channel in very fast order.
Opportunities on a Dollar breakout/ CRX decline…Basic materials and the metals should fall the hardest!