Dollar Index
Dollar Index
During 2018-2019 DXY made many rallies that ended in extreme sentiment readings of 94-96%, and after each move higher there was a consolidation and another attempt to move up. It looked like it would top out each time till March of 2020 saw the actual FED policy change the course.
We are witnessing something similar but at a faster pace. A series of readings between 92-93% bullish on the DXY, this is the third so far and I am waiting for that eventual reversal. But will it take a change in FED policy for that pivot to happen? Needs to be seen. So far the overnight reading is for a top near the top end of the channel. The entire move to 100 from the bottom in Jan 2021 is counter-trend in my view and wave 2 circle in the long-term scheme of things. Wave 3 down is awaited and once it starts would see a multi-month decline in the dollar.
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