In the middle of October I suggested to short the dollar in this post: Unfortunatley didn't have time for an idea to post. A few days ago I closed the short positions , and now I think it's very possible the dollar will print a rally in the following days.
The FED's rate hiking cycle pushed the dollar above 114 in the summer, but in October the market started to price the end of the aggressive rate hiking cycle... The dollar collapsed in a few weeks breaking every level almost without stops. At 101 finally we found a support. 101 was the bottom of the 2022.05.30.correction : and this is also the 50% FIB retracement of this 2-year-rally.
The chart is not giving too much sign of a reversal yet, only MACD is showing divergence, and trying to cross over. Ahead of the next week FED meeting I think we a have good chance for a dollar rally.
Nota
We have an important daily data today which will affect gold and dollar prices. the US core PCE index was at 4.7% in November and is expected to decline to 4.4% in December. I think the data will be 4.2-4.3% what clearly shows that the Federal Reserve’s aggressive monetary policy has effectively decreased inflation.
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