DXY: Under the 1W MA50 indicates a long term selling opportunityThe U.S. Dollar Index closed last week under the 1W MA50 for the first time since August and that signals the bearish extension of the decline that started on the October High. Naturally, the 1W technical outlook has turned bearish (RSI = 42.067, MACD = 0.190, ADX = 46.054) but the 1D is oversold (RSI = 29.749) and calls for a rebound in order to harmonize this state near neutral numbers.
That matches very accurately the behavior of DXY after every 1W MA50 bearish breach (circles on your chart) as after the break it always consolidated with a small rebound and then resumed the sell to extend to a new Low. In May 2016 that stopped on the S1 level but in the next two occassions, it made two new Lows on the LL trendline.
Consequently our long term target is the S1 (TP1 = 99.550). Then as long as the price doesn't cross over the 1W MA50, we will resell on the bounce and target the LL trendline (TP2 = 96.450).
See how our prior idea has worked:
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