The dollar makes a compelling case for more gains

The rebound looks like a larger retracement

The rebound looks like a larger retracement

The dollar index trendline isn’t exactly a textbook, but combine it with the inverted head and shoulders and the short dollar position and there’s a compelling case that it’s more than rebound.

We have been struggle with this question all week and at some point you have to make a decision. I have highlighted the support in NZD / USD, EUR / USD, cable and gold. They are all broken.

The question to ask now is therefore probably: how high will the dollar rebound?

Using this DXY chart (full disclosure: I’m not a DXY fan), the initial goal is 96.00.

The pace of the movement could certainly slow down, but the implication is that it is only half finished.

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