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First: Historical Perspective (Month Frame) – The Rising Castle
Looking at the monthly chart since 2008, we see that the US dollar is moving within a typical major ascending channel. Recent price action shows an ideal rebound from the “channel bottom” (yellow area) at the 99.00 level.
Technical Importance: This rally is not just a random move, but a confirmation of the stability of the long-term uptrend.
Key Support: Stabilization above the psychological zone of 100.00, after a failed attempt at a “false breakout”, enhances the possibility of forming a “general bottom” to start a new upward cycle, targeting the channel upper limit above 120.00.
Second: Tactical structure (weekly frame)-descending channel
On the other hand, for the past three years, the movement has been restricted to the descending channel (red and yellow arrows).
Balance Zone: Price is currently testing the midline at 100.185.
Expected scenario: According to the channel school of thought, the current rebound from the monthly lows will push the price to test the weekly descending channel upper limit at 104.50 – 105.00 levels in 2027.
Third: Strategic Anticipation and Channel Integration
Following Richard Donchian’s principles, we now observe a process of “role exchange” between channels:
Bullish Next Wave: Once the cap is hit, prices are expected to break free from the pressure of the weekly descending channel, supported by monthly momentum.
Target: A break above the 106.00 level would open the door for price to accelerate towards the previous all-time peak of 114.70 and then towards the upper monthly channel target.
Continuity Condition: This bullish analysis remains valid as long as we have no monthly closes below the 98.00 level, as a break above this level would mean the breakdown of the bullish structure that has been in place since 2008.
Technical summary
We are facing a “strategic consolidation” situation at the bottom of the monthly channel. Although the weekly frame shows a decline, relying on the support of the large channel, priority is given to the long-term buying scenario. The U.S. dollar is currently gathering strength to test overhead resistance, which puts it in an area of great concern in the coming months.