The US Dollar Index has broken below the neckline of a short-term Head & Shoulders pattern. As such, weakness is now anticipated to retest support that held the April & August lows, near the formation’s measured move target. Moreover, the 200-day MA has become resistance, which highlights the inability to reclaim former neckline support. This suggests that weakness could quickly resolve into a bearish thrust to 79.81/80.07 (61.8% retracement/ August low) then briefly recover ahead of a potential final exhaustive decline that would then complete the bear campaign. Meanwhile, reclaiming former neckline support at 81.90 will stabilize and potentially reopen short-term trendline resistance located near 82.70.
STRATEGY: LONG S&P 500 at 1056, risking 1103, targeting 1130
BUY EUR/USD at 1.2938, risking 1.2883, targeting 1.3382
