The US Dollar Index is sitting around $97.83 on the 4 hour chart, having just broken below its red 50 period MA and that key horizontal $98.23 support with those telltale bearish engulfing candles. Price is still respecting that white descending trendline which started all the way back in April, but is at the same time printing lower highs and lower lows. The blue support line at $98.00 hasn’t been able to hold the price up – and that Fib retracement from the recent swing high is suggesting a next downside zone of $97.29-$96.86.
The RSI is now below 45 which is a pretty clear sign of bearish momentum without being over-sold – yet. The volume profile has marked $98.23 as a major resistance level which has now been flipped. As long as price is below $98.60 the structure remains bearish and any rallies are capped by that channel ceiling.
Trade Idea: Consider selling DXY around $97.82, targeting $97.29, with a stop at $98.10.
