The U.S. dollar has been in freefall since early November. But now there could signs of stabilization – at least in the near term.
The first pattern on today’s chart of the U.S. dollar index is the 101.95 level. It was a weekly closing high from March 2020 before the Federal Reserve’s dovish policies pushed the greenback lower amid the pandemic. Notice how DXY bounced near this level last May and is holding it again this week.
Second, the recent low represented a 50 percent retracement of the dollar index’s surge between May 2021 and September 2022.
Third, stochastics are trying to rebound from an oversold level. Today’s big swings also produced an outside candle.
Finally, the calendar might be a challenge with the Fed meeting two weeks away. A lot of hopes for more dovish policy have been priced in. Can it keep moving in the same direction, or will sellers look to cover before the news?
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Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
The first pattern on today’s chart of the U.S. dollar index is the 101.95 level. It was a weekly closing high from March 2020 before the Federal Reserve’s dovish policies pushed the greenback lower amid the pandemic. Notice how DXY bounced near this level last May and is holding it again this week.
Second, the recent low represented a 50 percent retracement of the dollar index’s surge between May 2021 and September 2022.
Third, stochastics are trying to rebound from an oversold level. Today’s big swings also produced an outside candle.
Finally, the calendar might be a challenge with the Fed meeting two weeks away. A lot of hopes for more dovish policy have been priced in. Can it keep moving in the same direction, or will sellers look to cover before the news?
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
