USDX Forecast: Will the Dollar Drop Below 100 or Stage a Surprise Rebound?"
K Karthik Raja (Market Educator & Technical Analyst)
MCA | MBA | M.Com | MSc Psychology | PGJMC | CST | MDAT | CFA Pursuant
Chart Pattern
- The chart is showing a descending trend after a peak around 109.25, indicating a downtrend.
- Consolidation observed around the 103.50 - 104.00 region, indicating a possible base formation.
- No clear reversal pattern like a double bottom or inverse head & shoulders yet.
Trend Analysis
- Short-term trend: Bearish (Lower highs and lower lows).
- Medium-term trend: Bearish (Price trading below 200 MA).
- Long-term trend: Neutral to Bearish (Downtrend started post-109.25, needs a higher high for confirmation of reversal).
Upcoming Events
- Inflation data and Interest rate decisions remain key drivers for USDX movement.
* Geopolitical risks & macroeconomic events (oil prices, US debt levels, FED policy stance) continue to influence market sentiment.
* FOMC meeting concluded on 19.03.2025 – Market reaction to FED’s stance will shape the trend.
Volume Analysis
- Low volume on the up moves, indicating weak buying pressure.
- Increased volume on down moves, confirming strong selling pressure.
- Key Insight: No clear accumulation signals yet; needs a volume spike on a breakout above 104.50.
Observations
* Bearish trend intact but showing early signs of a base formation.
* RSI & MACD showing mixed signals (Momentum not fully bullish yet).
* Fibonacci resistance at 104.80 and 105.80 is crucial.
* Volume trend favors sellers, unless a reversal signal emerges.
Final Takeaway
- Current Bias: Bearish to Neutral.
- Key Resistance to Watch: 104.50 - 104.80 (Breakout Zone).
- Support Zone: 103.20 - 103.50 (Breakdown Risk).
- Strategy: Wait for breakout or breakdown confirmation before entering trades.
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Breakout Strategy (Bullish)
* Entry: Above 104.50 | Stop-loss: 103.50
* Target 1: 105.80 | Target 2: 107.00 | Target 3: 108.50
Confirmation Needed: MACD above zero, RSI > 60.
Breakdown Strategy (Bearish)
* Entry: Below 103.20 | Stop-loss: 104.20
* Target 1: 102.00 | Target 2: 100.50 | Target 3: 98.80
Confirmation Needed: Increase in volume & momentum drop.
Conclusion: Watch 104.50 for bullish confirmation and 103.20 for bearish breakdown.