DXU10 – September Dollar Index (Last:82.70)

The September U.S. Dollar Index futures surpassed a midpoint pivot on Tuesday, which tells us that the sibling “D” target at 83.33 will likely be reached.  The dollar rallied and the Euro fell hard on Tuesday, reversing trends in effect late last week.  Should the dollar reach its 83.33 target, it will nonetheless fail to surpass last week’s highs, and might be expected to initiate a new downtrend from there.  Traders can short the target with a stop at 83.41, just above those prior highs.  (Posted by Doug McLagan)  _______ UPDATE (1:20 p.m. EDT):  After a pullback, the dollar index rallied back to just above the midpoint for a second time, after which it fell below our “C” point and broke the pattern.  Therefore the 83.33 target is no longer active, and the trade should not be undertaken.