The DXY Dollar Index price plunged after escaping from the rising wedge pattern. Now it is located under the 92.00 psychological level. It has dropped by almost 1% for 92.74 yesterday’s high. The current sell-off was triggered by the FOMC meeting. The Federal Reserve was disappointed with its conclusions and remarks after its July meeting.
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The Dollar Index needed only a bearish spark to confirm and activate the rising wedge reversal pattern. Currently, the DXY is in a corrective phase. However, some poor US data reported tomorrow could push the rate down.
The US Core PCE Price Index, Chicago PMI, Revised UoM Consumer Sentiment, Personal Income, and the Personal Spending could save the DXY from the downside if the figures are better than expected.
The DXY resumed its decline after the US Advance GDP reported a 6.5% growth far below the 8.5% estimate. Also, the unemployment claims have disappointed by dropping from 424K to 400K. The specialists have expected a potential drop to 382K.
DXY price technical analysis:
DXY failed to stabilize above the major downtrend line and now is almost to reach the 38.2% retracement level. Yesterday’s candle signaled a further decline in the short term. The index has retested the broken uptrend line, and it has closed far below it.
Technically, the 91.92 and the weekly S3 (91.49) are seen as strong downside obstacles. DXY’s deeper decline indicates USD’s depreciation versus its rivals versus the other major currencies.
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DXY dropped within a descending pitchfork. It’s located far below the median line (ml). The bias will be bearish as long as it stays below this dynamic resistance. The 38.2% level is seen as the immediate potential support.
Dropping below it could signal further drop towards 91.51 and down to the descending pitchfork’s lower median line (LML). On the other hand, staying above 38.2% and coming back above the median line (ml) could signal that the correction is over and that the DXY could turn upside.
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