“From February to December, a large head-and-shoulders reversal formed with a rising neckline,” he added, noting the dollar’s bearish technical formation.
A break below the neckline “would confirm the head-and-shoulders pattern and target further weakness,” Hill said.
“Such a move would be bullish for stocks because the Dollar and S&P 500 move in opposite directions,” he wrote. “Weakness in the Dollar would suggest a strong appetite for risk, which would bode well for risky assets, such as stocks. A close above the December high would call for a reassessment of this bearish head-and-shoulders pattern.” [Dollar ETF Rally Hurts Stocks]
US Dollar Index
