Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Chart Of The Day: U.S. Dollar Aims Even Higher

By (Pinchas Cohen/ 11, 2021 09:24AM ET
Chart Of The Day: U.S. Dollar Aims Even Higher
By (Pinchas Cohen/   |  Oct 11, 2021 09:24AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

The dollar is on the rise after Friday’s weak US jobs report which traders think will keep the Federal Reserve’s tapering on course. The report showed the smallest increase in employment in nine months. Nonfarm payrolls rose by 194,000, dramatically lower than the 500,000 expectation.

This was another in a string of examples of US assets rallying on poor economic data, because of the expected reactionary monetary policy.

The dollar has been ranging after reaching a 12-month high. The psychological response of such a high may have resulted in profit-taking. However, the trading pattern has actually been supporting a continued rally.

Dollar Index Daily
Dollar Index Daily

The holding pattern since reaching the annual high has been in the shape of a pennant, seen to be a continuation pattern, due to its symmetrical shape. Buyers and sellers appear to be equal in their determination. However, given that the trend is up, bulls hold the advantage.

Since the pattern developed after the dollar index surged by over 150 pips—the majority of which was accomplished in just four sessions— the current standoff appears to be controlled by bulls.

The five-day advance presumably led to some profit-taking which has probably been weighing on the price. When long positions are closed, demand falls and at the same time, supply increases. 

But, rather than falling, prices have held as new bulls have entered the game, increasing their weight on the demand side of the scale.

Looking at the big picture we realize that the dollar recently completed a massive double bottom. This helps understand why a flag was created here. The dollar needed to “rest” after its exertion. This happens when there is profit-taking and it allows for new traders to come in and carry the dollar higher.

Trading Strategies

Conservative traders should wait for the upside breakout, penetration of which would overtake the pennant high, then wait for a pullback to test the pattern’s integrity, before risking a long position.

Moderate traders would wait for the same breakout pattern, with the upside move, followed by the return-move, for an entry closer to the presumed support, if not for confirmation of the trend.

Aggressive traders could enter a long position now, as long as they accept the raised risk that comes with the higher reward of moving ahead of other traders.

Trade Sample – Aggressive, Long Position

  • Entry: 94.30
  • Stop: Loss: 93.80
  • Risk: 50 pips
  • Target: 95.80
  • Reward: 150 pips
  • Risk:Reward Ratio: 1:3

Note: This is just a sample. You must develop a plan that addresses your budget, timing and temperament. Until you learn how to do so, you may use our samples, for educational purposes. If you have the illusion that you’ll make money, consistently, you will end up with neither education nor money. Guaranteed. No money back.

Chart Of The Day: U.S. Dollar Aims Even Higher

Related Articles

Omicron Weighs On EUR/AUD By Tickmill - Dec 06, 2021

The recent breakout higher in EUR/AUD has seen the market blowing through several key levels. The rally has recently stalled into a retest of the broken bull channel and the 1.6163...

Scott Barkley
NZD/JPY Breaks Out Of Channel By Scott Barkley - Dec 06, 2021

NZD/JPY is currently going down at the time of this post. The pair is trading at 76.52 and in a channel. If we break the upper side of the channel, we are looking for an initial...

Chart Of The Day: U.S. Dollar Aims Even Higher

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Heine Pedersen
Heine Pedersen Oct 11, 2021 11:22AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
What doesn't make the dollar go up??
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email