Dollar Can look For A Final Leg Up

20 Eki 2023

Hey traders,

In this article, I will talk about Dollar index, but before going into it, I want to invite you to our webinar here on tradingview like each Monday at 15CET, CLICK HERE

For now the USD remains in uptrend despite Powells comments yesterday, who acknowledged that the increase in bond yields was leading to more restrictive financial conditions and recognized that this could potentially impact monetary policy. Not exactly really sure what this means for their decision looking forward, but I am sure that the main goal is to bring inflation back down to 2%, so possibly they may not hike too much anymore, but rather only keep rates at high levels for longer periods of time.

However, high yields are not the only main problem these days, we also have geopolitical issues that may not end any time soon, so the dollar remains in an uptrend ahead of the weekend as a "safehaven".

Looking at the Dollar index chart, notice that there is a nice and strong support still in play for the DXY, its at March swing highs, so as long this one is not breached tot eh downisde, the uptrend for the US currency is still alive. In fact, from an Elliott wave perspective, we see nice corrective wave four here, possibly even its a triangle, so one more push is possible, especially if stocks will stay in risk-off mode.

If 105 support is cleared out then I may consider a top for the DXY.

Trade well,

Grega