Dollar is overbought

INDEX:DXY   U.S. Dollar Index
60 2 1
You seen on the chart, RSI is overbought. In the past two incidence, we see that the dollar fell when it was overbought. So, we need to keep an eye on that.
If you look more closely, you will notice that the two peaks that you outlined were parabolic. The current uptrend is not parabolic. Besides that, the dollar has the FED on its side. Shorting the dollar when the FED is preparing for a hike? These are the situations when strong S&R levels get broken. Even if this is overbought, even if RSI will reach 99.9, there is no reason to short the dollar, at least not an a weekly Time Frame. Obviously, swings are something else.
+1 Reply
seine vlad.adrian
2 years ago
You are right, I won't suggest shorting but just waiting for an entry signal.
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