DXY: The Dollar Bulls could be looking to back down this week
The Dollar Bulls could be looking to back down this week as DXY finds itself at a critical level of support again. The index crashed yesterday following Powell's speech to the Economic Club of New York but found itself stalling on the Bullish trend line around 96.85.
The critical moment of Powell's speech that really shifted the market was 'Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy'. This statement is a stark contrast from the views of early October when Powell stated 'We may go past neutral, but we're a long way from neutral at this point, maybe.'
The above statement created a big drop across all USD pairs and also seen commodities like Gold and Silver jump higher as we predicted was a possible outcome earlier this week. What is interesting is how the Technicals and fundamentals are coinciding with each other, the drop in value for DXY only managed to pull price down to rest on the Bullish trend line and the same occurred for USDCAD. This solidifies the power of technical analysis and that fundamentals should only be used to add confluence to your trading. For DXY to properly plummet we need to see a strong break below this Bullish trend line which will likely see levels down in the mid 95's again.
Written by Sam Moore
Instagram - @Moore_Fx