‘De-dollarization’ touts about the US dollar should regenerate if Uncle Buck loses the base breakout and bull traps
The US dollar index has been asking the question “bull trap?” * since well before it actually broke above the March high, to create said potential. That is because we had anticipated a potentially strong rally off of the false breakdown in July (ref. July 19 NFTRH+ video update, now public), which included much chanting about the BRICS and de-dollarization. The de-dollarizers got bear trapped and now the poetic outcome would be a bull trap.
Just last week USD bear trapped upward out of a bull flag and this week lost that flag breakout, which is a bearish omen, short-term. From an NFTRH+ update yesterday:
USD’s bull flag is getting thumped and the question “bull trap?” is still a valid one. The pattern continues to favor ‘bullish consolidation’ as long as it holds the SMA 50, but the looks of RSI and MACD indicate a southern exposure.
If Uncle Buck makes a bull trap and declines there is much more to the story. I’ll leave that for NFTRH to manage, but here is a hint; if at some lower level you hear the De-dollarization chants start to reverberate loudly, have some caution. The bear trap scenario is only indicated to be a breakout failure and little more at this time. Beyond seasonal market rallies, the global counter-party is expected to find a liquidity bid in the coming months.
* Well actually, your friendly NFTRH blogger has been asking the question.
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Pretty big red candle today along with a decisive break of the 50-day. However, the USDX has done nothing but frustrate the bears since that false breakdown in July. I like today’s action, but I’m on high alert for more tricks.
Sounds like a rational plan!