For traders, DXY is the most crucial currency index as it indicates USD strength or weakness and many of the instruments traded depend on that.
After it broke below an uptrend line 109 it continued spiraling downside with a strong indication that the top is in place, but…
A break below the 104 resistance line tends to confirm the downside continuation into possible 95, but we could see a pullback from here higher to retest 104 again, which can be triggered by NFP print.
To invalidate an immediate extension lower DXY needs to break above 104, if we get a pullback retest and DXY stays below 104 the downside extension will not be invalidated.
There will be a lot of noise during the news and we suggest traders not trade this even but use it as an anchor for market directions and their trades in the hours after or on Friday and the days ahead. In case, you are a news trader and don’t want to miss this print, choose your lot sizing wisely.
