DOLLAR RETRACE TO 103+ ON FOMC & NFP VOLATILITY ?

COT:

• Dollar has weakened significantly since mid NOV-22
  
• Driven by institutional selling of long contracts since begin Q4-22
  
• Assisted by accumulation of short contracts sinds JAN-23
  
• Outlook for Q1-23 remains sideways to down
  
• Next downside level is 99.60
  

FOMC & NFP:

• Before another drop below 100 big figure a retrace is likely
  
• 103+ will likely be mitigated in FEB
  
• 103 = mitigation level = GAP resistance = sell VWAP
  
• Begin FEB is pivotal week(s) with FOMC & NFP
  
• FOMC and/or NFP volatility will likely facilitate the retrace
  

OUTLOOK:

• Will be monitoring price behaviour between 103.00 - 103.25
  
• Looking for change of behaviour on the lower timeframe (wicks into mitigation-level)
  
• Anticipating a swing lower from 103+ to 100- after mitigation
  
• This will offer buy setups in the MAJORS, with a preference for commodity CCY's
  

Comment:

- FOMC used to run stops below the market and lure breakout traders into shorts.
- FED whisperers and talking heads helped talk Dollar lower.
- NFP used to take the market by surprise and trap more traders short.
- Looking for Dollar to mitigate 103+ level.
- After that a break of structure to the downside is the signal to watch for possible continuation of the downtrend.