JICPT|DXY is on the verge of rebound on the weekly
Hello everyone. Dollar index has retreated from the high around 114 created in late September when investors expected inflation would be cooling soon.
To make it clear, I also inserted U.S core CPI year-over-year data on the weekly chart. You can refer to the purple line. Obviously, The dollar index moved in line with the CPI data. Both topped around the same time.
When we looked at the DXY rising angle, we can see it accelerated to the upside since March 16, 2022, when Fed raised interest rate for the first time since the pandemic by 25bps. The main driving force behind the move is inflation. So what's next after the Dollar index took a dive of 50%.
From my point of view, the index may held above 100 for a while(relative strong) until inflation is confirmed to go back to the 2% target. That may happen in the H2 2023. The reasons are below:
1. After the dramatic move, sellers need to take a rest around key zones(fib 50-61.8%)
2. Dollar index has been over sold.
3. 100 combined with a strong demand zone is likely to prevent it from further drop.
If I'm right, there will be short opportunities for gold, and other currencies, e.g., EUR.
What do you think? Give me a like if you're with me.
To make it clear, I also inserted U.S core CPI year-over-year data on the weekly chart. You can refer to the purple line. Obviously, The dollar index moved in line with the CPI data. Both topped around the same time.
When we looked at the DXY rising angle, we can see it accelerated to the upside since March 16, 2022, when Fed raised interest rate for the first time since the pandemic by 25bps. The main driving force behind the move is inflation. So what's next after the Dollar index took a dive of 50%.
From my point of view, the index may held above 100 for a while(relative strong) until inflation is confirmed to go back to the 2% target. That may happen in the H2 2023. The reasons are below:
1. After the dramatic move, sellers need to take a rest around key zones(fib 50-61.8%)
2. Dollar index has been over sold.
3. 100 combined with a strong demand zone is likely to prevent it from further drop.
If I'm right, there will be short opportunities for gold, and other currencies, e.g., EUR.
What do you think? Give me a like if you're with me.
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