The
DXY
Dollar has broken critical support
The dollar has broken down from its parabolic curve that has been intact since October 2021.
We now have 3 daily closes below the curve indicating a significant trend change in the dollar. Risk assets are generally negatively correlated to the dollar. Therefore Crypto and the stock market tend to go up when the dollar goes down and vice versa.
The DXY has also perfectly hit the upside target of $114 - the 1.618 fib extension target.
We also have multiple bearish divergences on the daily and weekly timeframes.
Daily bearish divergence: MACD, RSI, Stochastic, Momentum as well as the Vwap
Weekly bearish divergence: Stochastic
Downside targets are as follows:
Short Term : $108 & $104.5
Longer Term: $103 (This is a strong monthly support and will be tough to break)
$101 to $98 - Golden Fib (0.5 to 0.618 fib retracements
Conclusion:
We should see a rapid decline in the DXY over the coming months which will trigger a bullish wave across many sectors of the stock market as well as Crypto.
Don't forget about the seasonality aspect that could be in play - i.e the Christmas Rally
Good Luck
DXY
Dollar has broken critical support The dollar has broken down from its parabolic curve that has been intact since October 2021.
We now have 3 daily closes below the curve indicating a significant trend change in the dollar. Risk assets are generally negatively correlated to the dollar. Therefore Crypto and the stock market tend to go up when the dollar goes down and vice versa.
The DXY has also perfectly hit the upside target of $114 - the 1.618 fib extension target.
We also have multiple bearish divergences on the daily and weekly timeframes.
Daily bearish divergence: MACD, RSI, Stochastic, Momentum as well as the Vwap
Weekly bearish divergence: Stochastic
Downside targets are as follows:
Short Term : $108 & $104.5
Longer Term: $103 (This is a strong monthly support and will be tough to break)
$101 to $98 - Golden Fib (0.5 to 0.618 fib retracements
Conclusion:
We should see a rapid decline in the DXY over the coming months which will trigger a bullish wave across many sectors of the stock market as well as Crypto.
Don't forget about the seasonality aspect that could be in play - i.e the Christmas Rally
Good Luck