In The Alternative View I outlined some charts I see as critically important to watch in 2021. One of these charts is the US dollar, particularly because it, against all popular sentiment, shows potential for a sizable bullish move to come in 2021.
I say potential because as chart technicians we look for predictive patterns to help assess future risk/reward. We are also perfectly aware that patterns can get invalidated or not trigger at all, but when patterns kick in and confirm price tends to follow the predicted path. Technical patterns emerge all the time and traders use them to define their entries and trade direction.
Patterns can emerge on an intraday day basis or in 15 minute charts, 2 hour charts and on longer time frames. Longer time frames are particularly notorious for testing the patience of the keen observers for they can take months to evolve and resolve.
If you read the The Alternative View you know about the declining wedge pattern and positive weekly divergence in the US dollar and I’ve been updating the chart on Twitter. For many wondering why Gold got hammered on Friday look no further to the US dollar which indeed began to show sudden strength after again tagging the lower trend line: