Today’s article for the  Technician’s Edge  column at GreenFaucet.com is on the recent early Trendline Breaks on the US Dollar Index.

I highlight the positive reversal breaks in the 50 day EMA, along with a short-term and long-term break which could have short-term… or even major implications going forward.

Here’s a chart of those trendline breaks:

(Click for full-size chart)

At a minimum, this argues for a short-term retracement up perhaps akin to the positive move that spanned from $82.50 to $87.00 in late March 2009.

These trendline breaks could argue, however, for a trend reversal which needs to be confirmed by price forming a higher swing low and then rising from that position of strength.

A positive trend reversal in the US Dollar Index would argue for a negative trend reversal in both Gold and Crude Oil and – if the inverse link with stocks continues – would also be bearish for stocks.

I also highlight the lengthy positive momentum divergences and show an Andrew’s Pitchfork Grid.

The quick conclusion is to watch this break very closely for any further signs of upside strength.  The nascent bullish break would be invalidated by any sudden move back down under these trendlines … which would be under the $75.00 index level.

See my new “Technician’s Edge” column article for the full post!

Corey Rosenbloom, CMT
Follow Corey on Twitter:  http://twitter.com/afraidtotrade