DXY INDEX, READY For a MAJOR BULL-FLAG-BREAKOUT!

Hello There!

Welcome to my new analysis about the DXY, U.S.-Dollar Currency Index on the 4-hour timeframe perspective. Within the recent times the DXY has shown up with these main bounces in the range to retest previous resistances. With this occasion I detected further important signs to consider especially as bonds recently trended upward and non-DXY economies seem to move forward with higher interest rates than firstly expected. The unemployment rates for August could support a further strengthening in the DXY especially when the wave breakout is showing up in the underlying forex pairs also. The price-action seems to have reached such a momentum that the reversal is not likely now. The only concern here is for risk-on assets to make a turning into the more bearish direction.

Major Trend-Dynamic Developments:
When looking at my chart now you can watch there the DXY emerged with this massive ascending-trend-channel in which it bounced several times within the lower boundary and supports the recent uptrend with forming the next new highs that are necessary to hold the trend to the upside. Recently the index then moved forward to form the next important formation within this whole structure which is actually a major bull-flag-formation as it is marked in my chart. Such a formation has the potential to convert into a determining and extended bull-flag-breakout and currently the price-action is already attempting to continue with this final breakout meaning that from there on the DXY INDEX is going to emerge with high volume and form the appropriate wave-extension as it is marked in my chart.

Upcoming Perspectives and Underlying Indications:
With these bullishly inclined technical indications there are several other important indications which make sure that the DXY is continuing with the expected breakout and aiming for the target-zones that will be active after the breakout. All the non-DXY currencies in the basket seem to move further with the increased interest rate periods, this means that the DXY is strengthened as the opportunity costs of holding DXY increase with higher interest rates in non-DXY baskets. Furthermore, the bonds and treasury bills marked is showing increased high yields to the upside recently which is a main factor for a bullish cause supporting the recent trend dynamics and the expected breakout to settle. Taking this into the perspective, once the breakout has shown up it will activate target-zones marked in my chart and from there on the further determinations need to be measured, especially when the DXY shows up with a strong momentum into the target-zones this can also lead to a trend acceleration with a breakout above the channel. It will be an interesting dynamic to consider in the next times, therefore the DXY is in the dashboard watchlist and we are going to reevaluate and update when important changes emerged.

Thank you for watching my analysis. Support from your side is greatly appreciated.

VP

Comment:

ANALYSIS UPDATE: The DXY greatly completed the bull-flag with the necessary preceeding bullish volume.

The target-zones are active now.

Comment:

ANALYSIS UPDATE: BOOM, the DXY reached all of the bullish target zones. ✔

The DXY is setting up an extended upper channel breakout.