Monday, June 13, 2016

Another Up-Leg For The U.S. Dollar (UUP)?

I've seen stranger things, but combined with the current geopolitical and economic picture figuring out the direction of the U.S. dollar (UUP) has become quite a challenge. Some time ago I posted the downtrend with a predicted reversal in May but was admonished by readers on Slope Of for not appreciating the bearish EMA crossover and recent strength in gold. I stuck by my prediction which turned out quite profitable and UUP was rejected on the upside by a channel resistance line at around $24.80.
Now where do we go? UUP appears to have made a wide ascending channel setup by the low in May at the high on the 1st of June, but what I've also noted is the possible creation of a large descending wedge. Descending triangles often have a positive break upwards which might be in response to future increasing interest rates, so the timing seems appropriate. Will the UUP be rejected at around $24.60 with a breakout later in the year, or will it be sooner in June or July which appears to be the setup now?