Overextended DXY: Preparing for a Bearish Correction This Week

The U.S. Dollar Index (DXY) is showing signs of being overextended after last week’s rally, with the weekly ATR (Average True Range) sitting at 1.5 but last week’s price action extending to 2.5 ATR. This suggests the market has moved significantly beyond its usual range, increasing the probability of a short-term correction. While the higher time frames remain bullish, driven by strong economic fundamentals, I’m expecting a pullback in DXY as the market cools off from its extended move. This correction could present opportunities for bearish trades before resuming the broader uptrend.