DXY: Bears Take Charge On The DXY As Expected!
Last weeks article published on the 4th April, highlighted the potential weakness we could see in the USD. Fast forward 5 trading days later and we are 0.50% lower or 60/70 pips at the time of writing. Not the biggest move down by any means, but there is further downside on the DXY in my opinion and I'll explain why.
As highlighted in my previous article, we have been range bound on the dollar index for some time now, from $95.00 to $97.50. The weekly and daily time frames are giving us bearish candlestick formations, indicating further downside pressure on the DXY. Furthermore, if we strip back the back charts and keep it nice and clean, we can see the path of least resistance is lower for the dollar. Looking at the bigger picture we can see our year-long trend-line is still in play and being respected very nicely, this would be our target and a good profit taking area. Once this trend-line is hit again, we will look to reevaluate and see how the price is reacting to this.
However, if the price was to burst above our strong ceiling at $97.50 with a daily closure, this would negate our trade idea and we would look for further upside pressure on the dollar. In my opinion, as mentioned above we could look to re-test our year-long trend-line before pushing higher.