Chart Of The Day: Dollar Likely To Advance To 115

The How is the regular deposit of MT4 platformFederal Market Open Committee increased by 0.75% for the fourth straight time yesterday. This hike pushes the top of its target range to 4%, the highest since 2008. Therefore, traders raced into trading the in an arbitrage-like fashion so they could reprice the market-implied peak in interest rates for 2023. I have previously readers to avoid the market herd that changes its opinion according to the short-term trend.

The US Dollar is penetrating the top of its falling wedge today, completing a continuation pattern, bullish in an uptrend.

Note that both the highs and lows within the structure point downwards, demonstrating that sellers are in charge. However, given that the lows are not keeping up with the same rate of descent as the highs, traders begin to lose patience.

That is what happened on Oct. 21, when the price penetrated the pattern top. However, it closed lower, well within the range. If today's trading remains above the pattern, it will show that bears are slipping. A decisive upside breakout will complete the pattern and put market forces back within the uptrend, ending the wedge's temporary disruption.

Trading Strategies

Conservative tradersshould wait for the price to penetrate 114, then wait for a three-day filter to reduce the risk of a bull trap, during which the price remains above the pattern, then return and successfully to confirm the pattern's completion, with at least one long, green candle. When that occurs they can risk a long position.

Moderate traderswould be content with penetration above 113.50 and a two-day filter, then wait for a return move for the better price, if not for added confirmation.

Aggressive traderscould buy after a close above the pattern.

Trade Samples - Long Positions

Aggressive

• Entry: 113.00
• Stop-Loss: 112.50
• Risk: 50 pips
• Target: 114.50
• Reward: 150 pips
• Risk-Reward Ratio: 1:3

Moderate

• Entry: 112.50 (after penetrating 113.50, 2-day filter)
• Stop-Loss: 112.00
• Risk: 50 pips
• Target: 114.50
• Reward: 200 pips
• Risk-Reward Ratio: 1:4

Conservative

• Entry: 111.50 (after closing above 114, 3-day price filter)
• Stop-Loss: 111.00
• Risk: 50 pips
• Target: 114.00
• Reward: 250 pips
• Risk-Reward Ratio: 1:5

Disclaimer: The author currently does not own any of the instruments mentioned in this article.

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