DXY | Harmonic Patterns | Technical Analysis. Recovery Underway?

DXY

Over recent sessions, I’ve been highlighting a critical zone for the DXY between $98.70 and $98.80, where several important technical patterns are forming that could signal the start of a rebound after the recent decline.

➡️ The dollar broke below the Head and Shoulders neckline at $100.27, hitting the default target I projected at $98.69, which corresponds to the 200% Fibonacci extension. This is a classic confirmation of the breakdown and subsequent drop.

➡️ However, since reaching this level, the DXY has begun to form strong bullish patterns:

Bullish Crab Pattern at the 161.8% Fibonacci extension, projected at $98.91

Bullish Alt-Bat Pattern at the 113% Fibonacci extension, at $98.80

These emerging bullish setups suggest a solid potential reversal, indicating that the DXY might be preparing to recover.

🎯 The default targets for these bullish patterns are around $99.95, aligning with key resistance zones and Fibonacci confluence.

Summary: The DXY has completed the expected downward move from the Head and Shoulders pattern and is now showing clear technical signs of a possible reversal. The price action in the coming sessions will be critical to confirm whether the index can sustain this recovery toward higher levels.

Safe Traders,
André Cardoso