DX1! (USD Index) looks set to bounce
Updated
The dollar index formed a small bullish candle on Monday, above the 200-day simple and exponential moving averages. Given the daily volume was relatively high compared with the candle, it could suggest a build up of buying pressure and potential cycle low. The daily RSI (2) was also oversold on Friday.
A bullish RSI divergence formed on the 4-hour RSI, and a false spike of the initial low also suggests momentum is shifting higher. Bulls could seek dips within Monday's range or enter live to seek a counter-trend move towards 104.50 (near a 38.2% Fib level).
A bullish RSI divergence formed on the 4-hour RSI, and a false spike of the initial low also suggests momentum is shifting higher. Bulls could seek dips within Monday's range or enter live to seek a counter-trend move towards 104.50 (near a 38.2% Fib level).
Note
Well, we had a bounce after US retail sales and import inflation beat expectations by a wide margin. But they were short lived as traders placed a greater emphasis on soft CPI from Canada and dovish comments from the Fed. We'll keep a watch, but may need to close out early unless there's further room for this to bounce higher.
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