DXY

I’m not big on head-and-shoulders patterns because they are everywhere one looks for them, but if the one shown keeps pounding away at the neckline of this misshapen specimen it could trigger a two-point break.  Alternatively, buyers would need to drive DXY above the 77.95 external peak to regain the offensive. If weakness implies the euro is about to surge, the headlines that we should expect to accompany such freakish behavior are difficult to imagine.  Maybe this: Europe Goes All-In on Greek Debt.

Two compelling trends, both of them nicely visible on the 240-minute chart (see inset), imply that DXY is bound for a minimum 80.10 once it surpasses a lesser ‘D’ target at 79.17.  So far, the index has stalled within two ticks of that number, a Hidden Pivot midpoint resistance, but once above it the run-up to 80.10 would become an odds-on bet.  Lest we be caught without an even more ambitious target if buyers should run amok, here it is: 81.49 (A=74.68, B=78.86, C=77.31). At that point, the dollar will have rallied 12% from its early-May lows, but it would need to reach 87.50 for the 20 percenter that would qualify as a bull market.