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US Dollar Q4 Technical Forecast: Building for Breakout

US Dollar Talking Points:

  • Below is a preview from the Q4 Technical Forecast for the US Dollar.
  • To access the full forecast for the US Dollar, click on the link below.

As we open the door into Q4, the US Dollar has finally broken out of the pattern of mean reversion that held so strong through the first nine months of this year.

Coming into 2021 the US Dollar had been mired in an aggressive sell-off that spanned the back nine months of last year. But support showed in USD at a very key spot on the chart in January, taken from around the 90-handle in DXY, and after starting to bounce in January, the move caught a bid in March as US Treasury Yields began to climb in anticipation of economic recovery.

But that theme fell flat in Q2, and for most of Q3, until the Fed began to gear up for an eventual move away from the ultra-loose policies that have marked their approach since the coronavirus pandemic came into the equation last March.

Towards the end of Q3, the US Dollar began to build a framework for a breakout, and that breakout hit this week as price action burst out of an ascending triangle formation. But can this continue? Will USD bulls bid the currency higher into the end of the year?

To get the full technical forecast for the US Dollar, click on the link below.

US Dollar Weekly Price Chart

US Dollar Weekly Price Chart

Chart prepared by James Stanley; USD, DXY on Tradingview

— Written by James Stanley, Senior Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX