An Ending Diagonal Triangle trading pattern suggests that the two-month rally in the U.S. Dollar Index is poised to end, according to MacNeil Curry, head of foreign-exchange and interest-rates technical strategy at Bank of America Merrill Lynch.
IntercontinentalExchange Inc.’ Dollar Index, used to track the greenback against the currencies of six major U.S. trade partners, has rallied 2.7 percent since Sept. 14 to 81.03. The Ending Diagonal Triangle, a pattern indicating a weakening trend that is on the verge of reversal, signals the gauge may be set to resume its fall from 84.1 in July, the New York-based Curry said today in a research report.
“This downtrend is on the verge of resumption,” Curry wrote.
The index’s break below 81.01 is a sign the gauge will fall and a trading-day close below 80.63 confirms the trend, according to the unit of Bank of America Corp. The Dollar Index has longer-term support at about 78.41 to 78.09.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.
To contact the reporter on this story: John Detrixhe in New York at email@example.com
To contact the editor responsible for this story: Dave Liedtka at firstname.lastname@example.org