DXY, the dollar index is in a strong bull trend, has been for the past year and it's slowly climbing higher, there is still some more upside based on technical analysis & fundamental analysis.
Technical Analysis reasoning: The index is making higher highs higher lows, support the bullish market structure. The broken top at 97.85 held well as support on the retrace, now we are gearing up for a break above 98.35 and a retrace to that level for the continued move higher to 99.50 the year-long high.
Based on a Fibonacci retracement, we hit the 50% retrace from the July dump and popped higher, the Fib extension level or target is 99.70.
There are two scenarios that can play out here.
The first is the immediate break above 98.35 resistance, the retrace into that level and pop up to 99.50
The second is the pullback to where the move started at 97.85 and the break then retest of 98.35.
Fundamental Analysis reasoning: The Federal Reserve is pulling back on its dovish monetary policy, which means a strong US dollar until they start cutting rates again the DXY has room to the upside.
Technical Analysis reasoning: The index is making higher highs higher lows, support the bullish market structure. The broken top at 97.85 held well as support on the retrace, now we are gearing up for a break above 98.35 and a retrace to that level for the continued move higher to 99.50 the year-long high.
Based on a Fibonacci retracement, we hit the 50% retrace from the July dump and popped higher, the Fib extension level or target is 99.70.
There are two scenarios that can play out here.
The first is the immediate break above 98.35 resistance, the retrace into that level and pop up to 99.50
The second is the pullback to where the move started at 97.85 and the break then retest of 98.35.
Fundamental Analysis reasoning: The Federal Reserve is pulling back on its dovish monetary policy, which means a strong US dollar until they start cutting rates again the DXY has room to the upside.
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Disclaimer: This trade idea is for educational purposes exclusively, this does not constitute investment or trading advice. TRADEPRO Academy is not responsible for any market activity.
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