Pattern: Head and Shoulder At Trigger Point On Dollar
The Dollar continues to fall, day after day. There is a head and shoulder pattern on the daily chart that is on the verge of triggering. A head and shoulder pattern is a bearish pattern that usually leads to further downside. The trigger (when the pattern is in play) occurs when the neck-line breaks. Please note the chart below. The tracking ETF used to view this is the PowerShares DB US Dollar Index Bullish (NYSEARCA:UUP). It is trading at $21.61, -0.03 (-0.14%).
While this pattern has been recognized by countless market technicians, once it triggers it may fail. According to the proprietary PPT Strategies, there is a 60% chance of pattern failure in the near term. Should the pattern fail, a sharp spike up would be expected on the Dollar which would result in a down move in the markets.