The US dollar index (DXY), a measure of the buck’s value against a basket of six major currencies, nosedived 1.4% last week, recording its third successive weekly decline.
Recent trade, by way of eight consecutive daily bearish candles, sliced through the lower limit of a bearish pennant configuration (98.27), subsequently taking on the 200-day simple moving average at 98.47 and demand from 98.18/98.65. Clearance of these areas throws light on a 78.6% Fib ret level at 96.40 this week – Friday bottomed just ahead of this angle following upbeat non-farm payrolls – as well as support at 95.84.
Additionally, traders will note the possibility of moves forming as far south as 93.97 over the coming weeks: the bearish pennant take-profit target, measured by taking the preceding move and adding the value to the breakout point (yellow).
Indicator-based traders will also acknowledge the RSI oscillator crossed paths with oversold territory Friday, after fluctuating around its 50.00 value since the beginning of April.
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