DXY. When to Expect a Weak Dollar?Hello traders and investors!
At the end of September and the beginning of October, I analyzed AUDUSD and EURUSD, where the technical picture predicted a decline in these currencies against the dollar. You can find these posts in related ideas. There were discussions with colleagues about how many countries' economies need a weaker dollar. I wouldn’t mind profiting from a dollar decline either, but a month and a half ago, there were no signs of a DXY drop. Let's take a look at what the chart suggests and when this might happen.
Weekly Timeframe
A sideways range formed on the weekly chart in March 2023 (point 4 was established). The lower boundary is 99.099, and the upper boundary is 106.952. The buyer's vector 11-12 has reached its obligatory target — the price level of point 10 within the range (106.169). This means we can start watching for seller activity on the weekly timeframe. If the sellers show up, the seller's vector 12-13 becomes relevant, with potential targets of 99.807 and 99.099.
Note that the key bar (with the highest volume) of the buyer’s vector 11-12 is the bar from November 4.
Daily Timeframe
There’s a long trend on the daily chart. The last buyer's impulse ranges from 103.86 to 106.734. The key bar of the impulse (highest volume) is the bar from November 14.
Hourly Timeframe
On the hourly chart, a sideways range has formed. The lower boundary is 106.037, and the upper boundary is 106.734. The current buyer's vector 8-9 has potential targets of 106.681 and 106.734. From there, it's not far to 106.952 (the upper boundary of the weekly range).
Summary
The price has approached levels on the weekly TF where a reversal may begin. For now, there are no signs of a reversal on the weekly and daily TF. We need to see signs of seller activity on the weekly chart to look for short positions with the goal of realizing the seller's vector 12-13 in the weekly range.
You can look for long or short positions on the hourly chart by trading within the range from boundary to boundary (if the boundary holds).
Until the DXY reverses, looking for long positions in other currencies against the dollar is risky.
Good luck with your trading and investments!
