DX is Retesting its Blue Price Channel Bottom
DX is retesting the bottom of its price channel (blue). A reversal here or part way into the channel that breaks out past the first breakout low would be a melt-down set-up.
A retrace all the way to the channel top would mean the DX has started a bottom, though the bottoming formation would likely take DX to lower lows. The bottoming pattern could be an inverse H&S, megaphone, triangle or falling megaphone. A consolidation like a triangle could break out downwards instead of upwards.
DX is likely to go for its megaphone bottom. It’s unclear whether that will be the red line or silver line–probably the silver line. The DX is likely to break that line by roughly the same amount it broke through the red line at the top.
The DX could also put in a false bottom here, retrace to the red megaphone VWAP, and then fall to the megaphone bottom.
Before a genuine breakout downwards from the red megaphone, DX would usually retrace to its VWAP in the 95-96 area.
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