The Dollar Index is stuck at 98.73, consistently failing to hold onto gains below that trendline that’s been kicking it back all day. The 98.80-99.00 zone is like a magnet – it’s where previous support turned resistance and just refuses to let the Index get past it. As a result price is stuck floating in no mans land between the 50 EMA and the 200 EMA – and that’s a pretty fragile recovery if you ask me, especially within a bigger bearish setup.
You see a rejection wick poking its head up near 99.20 and that tells me the sellers are still waiting in the wings to pounce. RSI is hovering around mid-levels and its a pretty good sign that there’s not much conviction on either side of this trade.
If the DXY can’t break above 99.00 then I think we’re looking at a decent chance of it sliding down to 98.20 & 97.80. But if – and it’s a big if – it manages to break above 99.20 then I think you’ll see a shift in the sentiment – with a chance of a run up to 100.00.
