Yesterday produced a volatile (wide bodied) spinning top candle beneath 80.50 resistance on the USD Index to suggest a bearish pattern emerging.
I am satisfied that the original bullish wedge pattern has now completed and will now seek of the next target. Yesterday certainly inspired the double top bias as I had already noted the lower volume seen around the recent highs to show a lack of buying pressure and / or commitment to push up higher.
I would prefer to see a clean break below 80.20 (at least) before getting too excited though. We saw a lower break yesterday only to close back above this level but I have found it a tendency to see increased volatility at tops and bottoms as a precursor to reversals. Sometimes. Perhaps yesterday's wide-bodies Spinning Top is just that - increased volatility as we see a change in hands from bulls to bears and a pending move down.
To trade the actual double top is too tricky in my own opinion as it is not exactly a clean pattern with an adequate reward to risk (where is the break line for example..). However we could just take note that 80.50 has held as resistance twice now, so there is our second top and may provide a bearish swing trade for the more adventurous.
In turn you could seek bearish setups on USD/CHF (which also exhibits a topping formation) or bullish trades on AUD/USD, EUR/USD, GBP/USD etc.