US Dollar in Early Correction Phase?

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The U.S. Dollar Index (DXY) has violated its “Dec 14 FOMC low” at 100.73, and is in route to probe important support at its prior two major 2015 peaks at 100.47 (Dec 3, 2015) and at 100.39 (Mar 13, 2015).  If these levels are violated and sustained, this will argue for a deeper correction into the 99.00-98.40 area as a next immediate target zone.

Let’s notice the glaring weekly momentum divergence at the 2017 high compared with the price momentum confirmation that occurred at the March 2015 high.

The juxtaposition of the intermediate-term momentum gauges with the unconfirmed new-high price action is a powerful warning that the USD could be in the early phase of a major correction of its May 2011 to Jan 2017 Bull Market.

Mike Paulenoff is founder of MPTrader.com, where he provides live intraday analysis and trade alerts covering the equity, commodity, and currency markets.

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