Monday, December 12, 2011

Dollar showing signs of strength

The Dollar produced a candlestick known as a Bullish Belthold. This particular candlestick supports  the continuation of a current trend or acts as a reversal to an existing trend. The larger the body of the candle, the greater significance to its meaning. The Dollar is met with two resistance levels- the 2 previous minor peaks and the congestion zone. Price action reveals to us in the chart above that the congestion zone is an area suggestive of strong resistance. Watching how prices react when met at resistance levels can often reveal how strong or weak resistance is above. Prices when first attempting the congestion zone were immediately shot back down. This tells you that prices are very sensitive to the area and need to regain momentum before another try. The second attempt prices stalled again but  consolidating at the 20 day moving average just below the congestion zone. Now with today's close, prices are showing more resilence to the congestion zone and will attack soon yet again. The MACD managed to give a bullish cross from today's strength. Lets watch as prices make a run.

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