Did Jerome Powell Just Bury the Greenback?
The U.S. Dollar Index started falling early last month, and price action around yesterday’s Federal Reserve meeting may confirm its downtrend.
The first pattern on today’s chart is the 104 price area. DXY tried to hold that level in mid-November as it slid toward 102.5. The currency rebounded to stall at the same location last week. If old support became new resistance, it could indicate a downtrend.
Second, the 104 area represented a 50 percent retracement of the initial thrust. (It starts on the Friday before November 14's softer-than-expected inflation report.) That may confirm the direction of movement is now lower.
Third, stochastics are dropping from an overbought condition.
Next, the monthly chart below shows DXY retreating from the top of its longer-term range. Traders may see initial support at the July 2023 low, with significant space down to levels from mid-2021.
Finally, the recent peak was a 50 percent retracement of the initial decline. That may further confirm direction of movement is to the downside.
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Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures or cryptocurrencies); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and a futures commission merchant licensed with the Commodity Futures Trading Commission (“CFTC”). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association (“NFA”), and a number of exchanges. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services under federal and state money services business/money-transmitter and similar registrations and licenses.
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a member of NFA. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit https://www.TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
The first pattern on today’s chart is the 104 price area. DXY tried to hold that level in mid-November as it slid toward 102.5. The currency rebounded to stall at the same location last week. If old support became new resistance, it could indicate a downtrend.
Second, the 104 area represented a 50 percent retracement of the initial thrust. (It starts on the Friday before November 14's softer-than-expected inflation report.) That may confirm the direction of movement is now lower.
Third, stochastics are dropping from an overbought condition.
Next, the monthly chart below shows DXY retreating from the top of its longer-term range. Traders may see initial support at the July 2023 low, with significant space down to levels from mid-2021.
Finally, the recent peak was a 50 percent retracement of the initial decline. That may further confirm direction of movement is to the downside.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures or cryptocurrencies); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and a futures commission merchant licensed with the Commodity Futures Trading Commission (“CFTC”). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association (“NFA”), and a number of exchanges. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services under federal and state money services business/money-transmitter and similar registrations and licenses.
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a member of NFA. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit https://www.TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
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