5 Days of Dollar Weakness, Will This Pair Break Out?

Traders shifted their focus from two interest rate decisions to employment data from the U.S yesterday, as the data showed that job losses had dropped by 26k, showing a figure of 550k – the lowest number in two months.
Wall Street jumped higher on the news, sending the major stock indices to climb throughout the session. Yesterday’s trading day was the fifth consecutive session of gains. Furthermore the S&P500 cleared its margin of security, to close above resistance number 2. From a technical point of view, one must note that even though the trend still seems to be pointing to higher ground, the major indices have formed a massive WU pattern.

The wedge up (wu), also known as an ascending wedge, is constructed of two lines containing the price action with both lines rising and converging to a point. Traditional wisdom suggests that the breakout of a wedge up is likely to be to the downside as the upward move becomes unsustainable. Only a break of the upper trend line confirms the trend higher. When taking a glance at the chart below one can see that even though the trend has cleared its resistance levels and indicators are turning positive again, a break of its upper trend line is still required to confirm the trend.

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Despite the technical patterns, all the sectors climbed higher with energy leading the way by 1.73% . Crude oil also presented a higher session, closing with a 1.35% profit. Crude has yet to break resistance of $75 to resume its trend.

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