DXY: Signs are we're ready for retracement?
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As we know the relative strength of DXY determines the direction of many pairs, and all of the USD crosses so I always keep an eye on it, even though I never trade it.
This bullish move from mid-July has been unstoppable, but is now giving clear signs of exhaustion and potentially a retracement.
Looking at the daily we've just closed with a pinbar, the first of this move up (I class the previous high closing candle as more of a doji as it has longer lower wick), which is a reversal sign (and could indicate the top of a LH), but we need to really wait for the next daily close to confirm, but I expect it to close lower (caveat - lot of news tomorrow with US Core PCE - however if today is anything to go by I'm not expecting it to change my analysis).
We've had stonking news this week for the USD yet we failed to make a new high, today's ahead of expectation and double GDP growth over the previous quarter even failed to entice more bulls, which tells me we need to fall back some.
Looking at the 1hr chart we can see multiple things going on, a head and shoulders with neckline break (failed retest), although also a double bottom (however I can't see this holding), I'll wait to see what happens into London before making moves:
https://www.tradingview.com/x/5c3AlNE6/
So overall, if we break 105.4 (to create LL) then I think we could see a fall back to either the 38.2% or 50% fib which will be approx. 104.4 and 103.5 respectively.
When this moves it moves fast and the impact will be great so watching crosses closely, especially GBP and EUR that are poised nicely for a bull run, but this is down to USD retracement rather than anything they have to offer.
This bullish move from mid-July has been unstoppable, but is now giving clear signs of exhaustion and potentially a retracement.
Looking at the daily we've just closed with a pinbar, the first of this move up (I class the previous high closing candle as more of a doji as it has longer lower wick), which is a reversal sign (and could indicate the top of a LH), but we need to really wait for the next daily close to confirm, but I expect it to close lower (caveat - lot of news tomorrow with US Core PCE - however if today is anything to go by I'm not expecting it to change my analysis).
We've had stonking news this week for the USD yet we failed to make a new high, today's ahead of expectation and double GDP growth over the previous quarter even failed to entice more bulls, which tells me we need to fall back some.
Looking at the 1hr chart we can see multiple things going on, a head and shoulders with neckline break (failed retest), although also a double bottom (however I can't see this holding), I'll wait to see what happens into London before making moves:
https://www.tradingview.com/x/5c3AlNE6/
So overall, if we break 105.4 (to create LL) then I think we could see a fall back to either the 38.2% or 50% fib which will be approx. 104.4 and 103.5 respectively.
When this moves it moves fast and the impact will be great so watching crosses closely, especially GBP and EUR that are poised nicely for a bull run, but this is down to USD retracement rather than anything they have to offer.
Nota
We're now just below yesterday's low and can see crosses starting to break their respective support and resistance levels.Nota
I think this was inevitable due to:General slowing down of the bull move
Yesterday's price action
Yesterday's reaction to the positive news
Today's positive news means that real yields are falling
Nota
Looking good so far
Penafian
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