DXY has been consolidating for a couple months after the large pullback that started in September. This consolidation is expected to continue over the new few months, with price expected to test at least the 107 level.
It is reasonable to expect the 110 breakdown level to be tested before another high timeframe round of weakness that will eventually break below the early February lows. This continued DXY consolidation and retrace over the next few months will likely limit upside on the major US indices and commodities.
With the recent Fed decision indicating continued focus on fighting inflation, this DXY retrace trend will likely continue until the Fed starts to signal a shift in their policy direction.
It is reasonable to expect the 110 breakdown level to be tested before another high timeframe round of weakness that will eventually break below the early February lows. This continued DXY consolidation and retrace over the next few months will likely limit upside on the major US indices and commodities.
With the recent Fed decision indicating continued focus on fighting inflation, this DXY retrace trend will likely continue until the Fed starts to signal a shift in their policy direction.