The dollar rally in May allowed the DXY to break above the blue 61.8% Fibo rate of 103.915 and the dollar rally looks ready to take a breather after touching a high of 104.695.
In terms of technical indictors, the daily MACD is rolling over and a sell signal seems imminent. The RSI is also turning after touching the overbought level at 80.00 which is supportive of the expected pullback.
The previous resistance rate at 103.915 will switch to a support and a break below this level will allow the DXY to fall onto the black 23.6% Fibo rate at 103.772 (slap bang in the middle of the blue support range). A deeper pullback will see the DXY pullback towards 103.314.
For now, I’m not sure how deep the pullback will be, but I expect it to be a bullish pullback. The worst-case scenario for the greenback will be a test of the 50-day MA level currently at 102.369 but thereafter I expect a strong rally back towards the current yearly high at 105.898 which coincides with the long-term green 38.2% Fibo retracement rate.
In terms of technical indictors, the daily MACD is rolling over and a sell signal seems imminent. The RSI is also turning after touching the overbought level at 80.00 which is supportive of the expected pullback.
The previous resistance rate at 103.915 will switch to a support and a break below this level will allow the DXY to fall onto the black 23.6% Fibo rate at 103.772 (slap bang in the middle of the blue support range). A deeper pullback will see the DXY pullback towards 103.314.
For now, I’m not sure how deep the pullback will be, but I expect it to be a bullish pullback. The worst-case scenario for the greenback will be a test of the 50-day MA level currently at 102.369 but thereafter I expect a strong rally back towards the current yearly high at 105.898 which coincides with the long-term green 38.2% Fibo retracement rate.
