Are we forming an ending diagonal in the USD Index? As can be seen in the daily chart above (Click on chart for larger image), there appears to be a rising wedge formation in the USD Index. If this wedge breaks to the upside, look for a false break and then the USD should weaken. However without the false break it is just a continuation pattern. This is important as the S&P 500 has hit a major extension target at 700 according to the structure that I see in the market. If this coincides with a false break higher as described above, this could be a very useful indicator to near term movement. Watch that Dollar!
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