Courtesy of Oracle Trading Systems…
Once trends in currencies develop they tend to trend for a long time. As evidenced by the long term chart above the Dollar has been trending below red line (C) for over 10 years. There were 3 major failed breakout attempts at the declining red line(C) since 2005 and it’s trying again for the 4th time. As you can see in the top momentum chart with each failed breakout attempt it was accompanied by extreme overbought conditions(red circles) such as right now. A clean breakout above red line (C) could signal a set-up for an upmove to its next green line resistance level(B). A breakout above this important resistance level(B) would could give the go ahead for a continued rally to its blue line price target (A) or 98. Is it possible? In 2002 not many currency experts expected the dollar then at 120 to drop all the way to 71.25 in mid 2008.
