The weekly US30 chart has an interesting shape to it. Since May, the index has charted a broadening pattern, defined by a higher peak followed by a lower trough.
The market is moving sideways, with expanding volatility and price swings. I.e. Even though the individual swings have fair amplitude, the US30 lacks a trend as defined by peaks and troughs.
In this regard, we consider two possible scenarios out of a myriad of possibilities.
The black dashed lines show a higher trough followed by a higher peak. This price action will be bullish, resulting in an uptrend for the US30.
The red dashed lines show a lower peak followed by a lower trough. This price action will be bearish, resulting in a downtrend for the US30.
The lack of trend will keep participants debating whether a bottom has been reached or not. More price action is needed to draw a conclusion with any confidence.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.