DXY: To Meet 97.00 Next Week As Bulls Take Charge
The DXY and Gold continue to display their inverse correlation of late with the Index rallying following a pinpoint rejection of the 95.00 key support level. This rejection was then followed by a breakout of the mid-December Bearish trend line to a peak of 96.48. Wednesday saw a retest and continuation off new-found support floor 96.00.
With the expected short term decline of Gold -the technicals would suggest that DXY is due to see a further rally higher in the coming weeks. I expect to see 97.00 met next week with the potential to climb even higher, at its recent peak in mid-December the Dollar Index failed to break above 97.71 but this could be time for 97.86 to be tapped. Should 97.86 be broken the next target is 98.79 daily resistance in line with Fib extension.
Either of these levels will likely prove to be points of reversal and should be studied carefully against the Gold chart and previously stated levels of support for the yellow metal in order to find optimum buy opportunities.
Fundamental factors are likely to cause volatility in the market for the USD next week with plenty of data releases and events scheduled, including the FOMC statement and Federal Reserve interest rate decision.
Written by Sam Moore
Instagram - @Moore_Fx