US Dollar Index Technical Analysis: Why a 4-year in the making head-and-shoulders pattern can send the Dollar down for the rest of 2018

• On the weekly chart, the US Dollar Index (DXY) has been trading sideways since early 2015.
• DXY has formed a head-and-shoulders pattern over the last 4 years. In 2018, DXY equally formed a nested head-and-shoulders pattern with the price is now below the 200-weekly simple moving average. DXY also found resistance at a trendline resistance from January 2017. The RSI indicator is still above the 50 line while the MACD has turned slightly bearish. The Stochastic oscillator is below 50 signifying weakness. 
• The 93.81 level (September 21 swing low) is the key support for bears as a break below would create a lower low and reinforce the bearish the bearish case.
• Alternatively, a break above 96.00 would be seen as a strong bullish signal and open the doors to the 2018 high and potentially way beyond (as the bulls would have invalidated the 2018 head-and-shoulder). 

DXY weekly chart

Spot rate:                 95.00
Relative change:     -0.46%
High:                        95.43
Low:                         95.00

Trend:                     Neutral

Resistance 1:         95.24 July 13 high
Resistance 2:         95.52 August 6 high
Resistance 3:         95.65 July 19 high (key level)
Resistance 4:         96.41 August 20 high
Resistance 5:         97.00 current 2018 high

Support 1:               95.00 figure
Support 2:               94.91 July 27 high 
Support 3:               93.81 September 21 swing low (key level)