© Dukascopy Bank SA
Two downward-sloping boundaries of the falling wedge pattern are gradually moving closer to each other, meaning the spread is declining. The base case scenario suggests the US Dollar is going to appreciate in the long run, but in the mid-term some bearishness still seems more probable. A formidable resistance is located near 3.90, where the upper edge of the pattern is boosted by the monthly S1 from below and by the 200-period SMA from above. This is the level, where we see a short-term cap for the Buck's rally. A new leg down will aim at the zone below 3.74, even though weekly technical indicators tend to neither agree nor disagree with such a future path of development.
© Dukascopy Bank SA