12.19.2021

Prior DIVERGENCE has caused about 150 basis points of corrective moves lower. Indicating we are in a TRENDING market in the USD (DXY). The EURUSD chart is similar, it has been on a free-fall since the pivot lower. We ask the question “if this has reached an inflection point?” or if this trend will blow-off through resistance on the chart. We are looking at SEVERAL charts and many options.

In the event of a BREAK OUT, it is very hard to determine how impactful that would be or what would the magnitude of such a move would look like. We focus our attention on RSI and how it has translated to the index in the past. We use the same DIMENSIONS on all of our annotations, arrows are congruent, as are volume BOXES.

This is only an indication of how a past move could translate to now. A move in the USD of this magnitude at this current juncture, would be very detrimental to RISK assets, this would prompt a big corrective move in EQUITY INDICES (SELL OFF).