The U.S. dollar could also be ready for a bullish run after seeing a downtrend earlier this month.

Think the Greenback is prepared for an upswing?

Try the 4-hour chart’s reversal pattern!

U.S. Dollar Index (DXY) 4-hour Forex Chart by TV

After days of retesting April and June’s lows, the U.S. dollar could also be preparing for a bullish run.

And why not? Weak growth readings from a few of the most important economies and the PBOC’s surprise rate of interest cut are highlighting the Fed’s relatively less dovish stance and the dollar’s shelter status.

Higher U.S. bond yields and U.S. equity prices may additionally attract bullish demand and push the U.S. dollar higher.

But are they enough to push the currency index higher?

Do not forget that directional biases and volatility conditions in market price are typically driven by fundamentals. For those who haven’t yet done your fundie homework on the U.S. dollar, then it’s time to ascertain out the economic calendar and stay updated on every day fundamental news!

As you may see, USDX is sporting a possible Inverse Head and Shoulder pattern within the 4-hour timeframe after a powerful downswing starting in late June.

Bullish candlesticks and consistent trading above the 104.40 “neckline” open the index to a move back as much as the 105.00 psychological handle if not the 106.00 June highs.

Then again, dollar bears could be taking a break and would soon price within the Fed’s future rate of interest cut/s.

If USDX finds resistance from the pattern’s “neckline” and trades lower, then the dollar may dip back to the 103.80 July lows and even drop to the 103.00 – 103.50 March inflection point.

Good luck and good trading this pattern!

For those who’re not conversant in the DXY, try our lesson, What’s the US Dollar Index?