$DXY | SilverEdge Insights |Technical Confluences:
Price action is in Oversold conditions in the Daily and Weekly Timeframe. Likely to see some consolidation of positioning here.
Price action broke out of an Upward Sloping Parallel Channel and cleared itself out of the that Interest Zone too. Likely will see a test to re-enter that Channel due to Oversold conditions.
Elliot wave count shows it is trying to compete Wave C (expected target would be to 71% Fibo Extension levels - possible to test the 100% Fibo level)
A new Downward Sloping Parallel Channel is in play now and Price action needs to see it break the mid of the Channel to see a substantial move downwards
Fundamental Confluences:
With the expected cuts, market started unwinding their long USD positions and it is reflected in the TVC:DXY
The extent of Wave C will really depend on how quick and reactive is the FED in cutting rates (the higher chances of 50bps cuts; the likelier we will see USD get sold.
Building into next week, we are likely to see some traders cover their short USD positions as they size down before NFP data.
However, if there is any gyration on the geopolitical front or US elections, it is possible to see the TVC:DXY reverse back to the top of the Downward Sloping Parallel Channel and top out at the Interest Zone area again
