The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies, bottomed at 73.44 levels on 27th July, which is a two month low. The index is currently at 74.13 levels is expected to rise towards 77.45 levels in medium term. The pattern is following the previous trend as it can be seen from the weekly chart of Dollar Index. The index has witnessed four bottoms since 2008, as they are indicated by the green and black arrows. At the beginning of the M–pattern, the index faced a small hold, which can be from the chart (between the first green and black arrow). The index is presently experiencing the same hold at the leg of the M–pattern, which is the end. The leg of the M-pattern is expected to form a new leg of the W-pattern. In the chart, the first and third dip; the second and fourth dip are connected by two different lines parallel to each other, which are found to be in same length. So, technically the M-pattern ends with the fourth dip at 73.44 levels. So, it is expected to move towards 77.00 levels in the near term. A breakout of the resistance at 74.90 levels would confirm the bullish trend.
EURUSD Weekly Chart:
Conversely, EURUSD is following the W-pattern which is extremely opposite to that of the M-pattern which is being followed by the Dollex. The leg of the W-Pattern is expected to be the new leg of the M-pattern.
The pair which has witnessed the fourth peak at 1.4536 levels is presently trading at 1.4314 levels. Only a break of the key support level at 1.4220 would confirm the bearishness in the currency pair, which can be seen from the daily chart. A break of the same, the pair could face a dip towards 1.4100 levels.