Let’s start with a backlog of the long USD swing thesis, which I first presetned mid 2021.
DXY was in the mid 90s when I posed my first major swing long USD trade plans. First major breakout being made on when price got above 100.
DXY might be about to fly for TVC:DXY by holeyprofit — TradingView
One of the key things for the USD breakout analysis was it looked a lot like we’re were setting up to see a failure of the 1.61 resistance - which very commonly denotes downtrend failure.
DXY to the moon? for TVC:DXY by holeyprofit — TradingView
Big breakouts were made in this swing and the DXY would continue about 10% higher.
DXY could make a 10% pop. for TVC:DXY by holeyprofit — TradingView
By this time the dollar was getting into the range of being 20% higher than where the original uptrend signals formed. USD had been getting little love up to them but around this time the call for the USD bull started to get really strong. Unfortunately, as often is the case, this was right into the resistance.
From there the DXY returns to the 100 zone. Trades nominally lower and is about 5% higher than it was now.
In this forecast I showed you how we can look for the W shaped bottoms and then use this to plan our trade from there.
And this is something I was waiting to see if it was offered.
And here we are.
At this point in time the bull plan I am going to present is based on an assumption there is a double bottom like W move formed here. So we have a very clear stop loss area. If and when the DXY trades under the previous low, this annuls the thesis. I’d not say at this point it’d make me default bearish, but we’d need to review.
Now let’s get into the trade plans for the long USD swing.
If the thesis I am presenting here is correct, what we had in the 2021 - 2022 rally would have been only the first major leg of the USD uptrend. The second leg would be expected to surpass it. Let’s get into how we can plan our trade levels, targets and where we want to be more cautious and more aggressive.
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