Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Dollar Consolidating Within A Triangular Pattern

|Includes: PowerShares DB USD Bull ETF (UUP)

The US Dollar Index (DXY) continues to consolidate, forming a 3-day ascending triangle pattern. Since completing a zig-zag correction off the November low, the recent pullback has been limited to the 38.2% retracement level. While the uptrend remains intact, lackluster follow-through hints of the possibility of a bearish shift.

The greenback's rebound has stalled near the mid-way point of the previous week's relapse. More importantly, this recovery has taken nearly twice the amount of time it took to decline from the recent high. This potentially suggests the formation of a secondary high or lower top. A loss of triangular consolidation support near the 80 handle could trigger the third test of 79.22 (the 38.2% retracement). In the event of a confirmed lower high, a relapse to the 50% retracement level at 78.39 would then be favored .

An uptrend is considered to be intact while price-action remains above the 38.% retracement of the overall upmove. Thus, a move above triangular resistance at 80.40 would reinforce the bullish structure. A short-term swing low above the 80.40 pivot could then expose the important 200-day moving average

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.