U.S. Dollar Index Analysis (DXY – U.S. Dollar Index) – After a week filled with economic news, will we see a continuation of the sell-off dominance?

After the Fed announced its interest rate decision, it cut interest rates by 25 basis points to 3.75% instead of 4%. This was the trigger for the transfer of control of supply power, causing the dollar to fall and break through the 98.617 level, and continue to fall until it approached what we call the 97.684 level, and then rebounded above that level to retest the 98.617 correction level.

Technical indicators have expressed the same view so far, by looking at the 20 and 50 day moving averages we notice the beginning of convergence and then an attempt to have a negative intersection, if this happens and is confirmed it will be a signal to confirm the negative view at least in the short term.

Based on the index’s performance so far, there are three possible scenarios for the coming trade:

• Negative scenario:
  Staying below 98.617 could indicate continued sell-off control and could target lower levels of 97.684 or even 95.918.
• Positive scenario:
  A break above 98.617 followed by a test and breakout and hold above 100.463 could indicate further upside, perhaps targeting 101.527.
• Casual scene:
  The consolidation extends between a low of 98.617 and a high of 100.463.

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