DXY daily - is in a large down channel . On January 12, it broke through a very strong trend line , which has been acting as support since June 2021 and as such represents a very strong support. That breakout is a very bearish indicator.
The RSI is in oversold territory, which indicates that there could/should be an increase in the price. The RSI shows several weeks of very strong positive/ bullish divergence indicating that the price is still falling while relative strength is not, what indicate a likely imminent or near-term increase in the price.
The MACD oscillator is ticking stronger to the down side and at the same time the signal line has fallen over the MACD line which is bearish .
Overall: DXY has corrected strongly after significant growth in 2021 and 2022. If DXY manages to close the day above the mentioned blue trend line , it would make a so-called dead hook or fake breakout and that would be very bullish . In that case, a falling wedge pattern (which would consist of present upper blue line and lower dashed line) would immediately form, which would also be very bullish .
In case of further decline, the red dotted lines are support.
Regarding the fundamental picture DXY , my opinion is as follows. A weak DXY has a very strong inflationary effect. A weak dollar affects the growth of OIL and stocks and which again has an inflationary effect. Considering the still extremely high inflation , I am of the opinion that the FED does not like the weak Dollar at all and that in a short time it will start with statements about further interest rate hikes in order to apparently strengthen the Dollar.
Likewise, the EU does not like a weak dollar either, because in the event of further inflationary pressure, inflation , which is already huge in the EU, will increase further, which will force the ECB to raise interest rates further, which will again strengthen the Euro and weaken the Dollar and further affect inflation .
Therefore, I judge that the Fed will do everything it can to raise the value of the dollar and keep it there for some time.
The RSI is in oversold territory, which indicates that there could/should be an increase in the price. The RSI shows several weeks of very strong positive/ bullish divergence indicating that the price is still falling while relative strength is not, what indicate a likely imminent or near-term increase in the price.
The MACD oscillator is ticking stronger to the down side and at the same time the signal line has fallen over the MACD line which is bearish .
Overall: DXY has corrected strongly after significant growth in 2021 and 2022. If DXY manages to close the day above the mentioned blue trend line , it would make a so-called dead hook or fake breakout and that would be very bullish . In that case, a falling wedge pattern (which would consist of present upper blue line and lower dashed line) would immediately form, which would also be very bullish .
In case of further decline, the red dotted lines are support.
Regarding the fundamental picture DXY , my opinion is as follows. A weak DXY has a very strong inflationary effect. A weak dollar affects the growth of OIL and stocks and which again has an inflationary effect. Considering the still extremely high inflation , I am of the opinion that the FED does not like the weak Dollar at all and that in a short time it will start with statements about further interest rate hikes in order to apparently strengthen the Dollar.
Likewise, the EU does not like a weak dollar either, because in the event of further inflationary pressure, inflation , which is already huge in the EU, will increase further, which will force the ECB to raise interest rates further, which will again strengthen the Euro and weaken the Dollar and further affect inflation .
Therefore, I judge that the Fed will do everything it can to raise the value of the dollar and keep it there for some time.
Consistency is the key of success....