At the current time of typing this the dxy seems to have found some temporary support. it may gather enough momentum to test the upside channel trendline however we would need to see at least a daily/strong bullish h4 close above the resistance to confirm it is now a support for this index. alternatively if we break below the current zone there is definite scope ...
Looking at the technicals, DXY has attempted to break the fib line more than once. If you look at USD JPY it has tried to penetrate the 114.40 a few times. We are not far from 114.40 again or far from 94.00. If DXY breaks 94 and USDJPY breaks 114.40 then great, on we go...
- Inverted Head and Shoulders on the daily. Would like to see a break of the neckline before making any big decisions on the USD Pairs
- Break and Retest of the descending channel
- Counter trendline being respected well currently
- Completion of right shoulder matches up with 0.5 / 61.8 fib retracement
Dollar Index DXY is sitting on critical support, a break below 91.00 opens the door to 88.50 which is a confluence of:
1) 61.8 fib of the from 78.97 to 103.57 = 88.50
2) it is also the 1.272 fib retracement from 91.98 to 103.57
3) 88.50 area has also acted as previous resistance on 2 occasions and is the break out point
I would expect a pullback to 95.5, where the 50 EMA is, 61.8% Fibbs, also 23.6% Fibbs on larger time frame and 10 EMA on Weekly time frame.
From there we could see leg lower to 92 or move higher to 96.5.
Dollar Index Monthly - Structure speaks for itself. Big moves to the downside expected. This correlates well with global indices and Oil they are also indicating a big correction on larger timeframes technically.