Ofir Signals | Oct 20, 2021 08:26PM ET
In my previous article, I mentioned that the US dollar index was climbing to resistance levels where it came under selling pressure.
We maintained a bullish view in that article. But, we now believe the US dollar could be in for a reversal, and here's why.
h2 Bearish View /h2Forget moving averages in corrections such as this. Since the beginning of 2021, the USD has been zigzagging between the 89 and 94 range.
The following days will bring us new developments regarding the signal. We would like to see a red arrow down before confirming reversion.
h2 Broader View/h2Pairs AUD/USD and USD/CAD have been on the rise, supported by COT - commercials with long signals and in well-defined impulsive waves.
The EUR/USD, which we thought might fail to revert, has resisted despite poor economic data. Meanwhile, the S&P 500 and the Dow Jones Industrial Average have shown strength.
It seems like the investing world is not concerned about higher inflation or Evergrande (OTC:EGRNY) as the volatility index has remained quiet, favoring long positions in stocks and short ones in the US Dollar.
h2 Conclusion/h2There is a possibility that the USD is reversing, respecting the 0.382 Fibonacci immediate level. Should it continue to go up, it will be choppy, most likely in a consolidation. Unless, of course, any unforeseen economic event sends the market to panic mode.
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