DXY: Waiting for a Return to 100

Jul 18

I’m waiting for DXY to come back to the 100 area.

That’s where I’ll be watching the reaction. If price reacts higher from there, I’ll consider the upside scenario.

If the reaction is weak and price moves lower, breaking the green monthly diagonal, I’ll expect the downside move to continue.

For me, the downside scenario looks more likely at the moment, but first I want to see what happens around 100.

The diagonal structure shown on the chart comes from my Magic Diagonals indicator, available on my profile.

Aug 2

Trade active

I've been waiting for this level for the entire month.
DXY spent almost the whole month moving toward the 100 area and the lower monthly diagonal. For me, this was the key level that I was expected.
The main question was simple: would price stay inside the monthly channel, or would it finally break below it?
Right now, it looks like DXY has managed to close below the lower monthly diagonal. If that breakdown is confirmed, the next targets are around 99 and possibly 98.
We'll know much more over the next month. If DXY remains below the monthly diagonal, it would confirm a weaker dollar and support the bullish outlook for gold and major currencies.