The DXY has been in a significant uptrend since mid 2011 and since the start of 2015 that trend has stalled and since then been consolidating above the 92 level. Recently within the past month a very important phenomenon occurred that gives us a great deal of insight into where the DXY might want to go over at the very least the short to medium term.
You will notice as indicated by the yellow circled candle wick, the daily candle of May 3rd 2016, price broke out below yearly lows extremely violently and ultimately got bought right back up. Since then it has been moving very aggressively to the upside. This movement to the upside has, in this past week broken above the last lower high in the previous downtrend and has held its ground and shown continued commitment to move higher.
With that we have been seeing most foreign leading currency pairs sell off. We can expect to see the DXY continue wit its momentum and the next objective is the 96.35 area which will give foreign leading currency pairs some room to continue lower.
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