DXY - Continued Downside More Probable than Upside
February was a month of moderate recovery for the US Dollar Index (DXY).
After an incredible rally through 2022, peaking in Q4 at 114.7, the DXY began retracing to a critical level below 101.7.
Historically (7 times) closing below the 101.7 level signaled larger drops for DXY. It narrowly dodged that fate with a solid bounce and February rally back to 104.6.
For the past two weeks 104.6 acted as resistance. I think in part this is due to mixed economic data showing an inconsistent recovery, and its also unclear what peak rate will be and how long we maintain it.
The Euro is looking healthy with it's recovery since September ongoing. This alone may be enough pressure to stifle a recovery for the Dollar.
Of course I'm not an economist. There is room for more upside on the Dollar, but my gut tells me this is a small rally with more downside in the future, which is bullish for equities, crypto, etc.
After an incredible rally through 2022, peaking in Q4 at 114.7, the DXY began retracing to a critical level below 101.7.
Historically (7 times) closing below the 101.7 level signaled larger drops for DXY. It narrowly dodged that fate with a solid bounce and February rally back to 104.6.
For the past two weeks 104.6 acted as resistance. I think in part this is due to mixed economic data showing an inconsistent recovery, and its also unclear what peak rate will be and how long we maintain it.
The Euro is looking healthy with it's recovery since September ongoing. This alone may be enough pressure to stifle a recovery for the Dollar.
Of course I'm not an economist. There is room for more upside on the Dollar, but my gut tells me this is a small rally with more downside in the future, which is bullish for equities, crypto, etc.