At the first look it is a great buying opportunity as we run to new highs.
Normally this kind of breakout would be a buying opportunity. My problem here that we are too late in this intermediate cycle to have a follow through after this breakout.
There is a decent chance that banks used this breakout last week to get out of dollar long positions and next week the smaller players will be left alone with their dollar longs...
The megaphone pattern is always showing uncertainity and chaos. In these patterns every new high and breakout usually a false signal.
If I'm right and this is a topping pattern next week instead of running higher price will drop back into the megaphone and we will have a steep decline to the lower in the following few weeks.
and TSI is signaling divergencies.
If price is reversing early next week I will immediately enter with shorts here.
Further, to explain on my view ( which I would not be doing anymore ) ... I believe that the market is expecting a huge fiscal stimulus from the new US administration in the form of infrastructure spending and tax cuts that will itself spur growth and spark inflation, which will put pressure on the Feds to tighten the monetary policy and increase the US interest rates at a faster pace than earlier.
I am also of the opinion that the new US admin might also look into all kinds of trade imbalances which are there today and might re-negotiate the same in order to create more jobs and spur the economic activity at home.
This all will keep the dxy on the upward trajectory!!
Buddy ... Mkts move and anticipate events much faster than Bolt !!
Yr reading of the Mkts displays that u r much far behind the curve ...
now, pls do not react frantically to my this statement :-)
Let time show what is correct ........... !!
Probably best to keep the BP in check !