In this article, we are drawing Pitchfork channels on DXY
On the monthly DXY chart, we can see that the instrument (USD currency basket Index) has formed a downtrend Pitchfork channel with the swing points 2 and 3 on which we can rely on. The latest reversal to the downside happened, near the channel top, and 61.8% of the Fibonacci retracement of the last swing down from the point 3, 97.395 level. If we get a monthly close here or even lower, we could now see an extension lower into the 84-85 zone which is also the half of the channel in the coming months.
Using Andrews Pitchfork tool hint: to plot Andrew’s Pitchfork on a chart, first look for three consecutive big highs or lows at the asset’s price. These key points are highlighted in the chart below.
Andrews Pitchfork trading technical analysis education! Join today for the new group!
We have used the combination of the top-down trading analysis and the Andrews Pitchfork channels to get to a trading entry stop loss levels and targets. On the daily chart, there is a new clear downtrend Pitchfork channel that could lead to a test of the median Pitchfork channel line 89 level. Use the possible pullback into 94.50 to enter a good risk to reward short trade entry with the stop loss above the 94.60 level, targeting 92 and 89 level lower. Invalidation of the downside swing will come only on a daily close above the 95.50 level.
