The greenback index has been cruising decrease prior to now few days. Is there nonetheless an opportunity to catch a fast correction on the drop?
Listed here are the pullback ranges I’m eyeing on the 4-hour timeframe.
U.S. Greenback Index (USDX): 4-hour
The Dollar has been trending decrease towards its foreign exchange rivals lately, thanks principally to stronger expectations of rate of interest cuts from the Fed subsequent 12 months.
Recall that the December FOMC assembly hinted at presumably three fee cuts in 2024, weighing on demand for the U.S. forex whereas additionally boosting risk-on flows.
This allowed the continuing USDX selloff to achieve traction, because the pair’s decrease highs are already related by a descending development line that’s been holding since November.
One other check of this resistance zone may be underway, and the Fibonacci retracement device exhibits the place greenback bears may be ready to hop in.
I can see some confluence on the 50% Fib, which strains up with R1 (102.43) and a former short-term help space that’s additionally near the development line. A shallow pullback might discover sellers on the 38.2% Fib close to the pivot level degree (101.91).
A bigger pullback might attain the 61.8% Fib just under R2 (103.13) and the 103.00 main psychological degree. Ensure you be careful for a return in bearish vibes that would take USDX all the way down to the lows at S2 (100.73).
Don’t overlook to maintain a watch out for profit-taking exercise earlier than the top of the 12 months, too!