U.S. Dollar Index (DXY) Dips Below $100, Sparks 7 Week Rally

U.S. Dollar Index (DXY) Dips Below $100, Sparks 7 Week Rally to Bollinger Band Highs

There have been a lot of media narratives surrounding a weak U.S. dollar, which has been further fueled by China and Russia improving their alliance through the BRICS nations to compete with G7.

Key Support Level:

• The white trendline has been a key support level at $101, which has been successfully defended twice (marked by the green arrows).
  
• However, there was a short-term break below this $101 support level (marked by the white circle) that also resulted in a break below the Bollinger Band support.
  
• Although this break below support is a sign of weakness, there was a lot of bullishness with DXY buying this discounted opportunity. This sparked a strong 7-week DXY rally to the upper range of the Bollinger Band.
  

Key Yellow Trendline

• DXY's 7-week rally appears to be running out of steam with DXY printing its first red candle this week. However, today is Wednesday and there is still more time before the weekly candle closes.
  
• I think that DXY will have a brief correction back down to the yellow trendline around $103.