DXY fell below the critical red resistance line after a failed rebound in the daily demand zone.
However, the daily uptrend can be sustained if at any time it climbs above the red line to find support. Therefore, we expect the CPI results to be released tomorrow will determine the DXY direction. Until then, it looks like we'll wait, creating a four-hour bullish pattern near the red line. If the CPI value falls tomorrow, it will come down to the weekly demand zone, changing to a correction pattern. In the weekly demand zone, DXY expects to turn upward, awaiting the Federal Funds Rate results at this month's FOMC meeting. If it rises from the weekly demand zone and moves above the red resistance line again, the big upside could continue for several weeks. Conversely, if it fails to rise near the red resistance line and turns down again, the monthly correction process is highly likely. If so, the decline could continue until it finds a bottom near the monthly demand zone.
For reference, if DXY succeeds in rebounding in the weekly demand zone, then EURUSD will fall below 1.0 in the weekly supply zone, resulting in a big drop.
So, please take a good look at the chart changes according to tomorrow's CPI results and next week's FOMC meeting results.
However, the daily uptrend can be sustained if at any time it climbs above the red line to find support. Therefore, we expect the CPI results to be released tomorrow will determine the DXY direction. Until then, it looks like we'll wait, creating a four-hour bullish pattern near the red line. If the CPI value falls tomorrow, it will come down to the weekly demand zone, changing to a correction pattern. In the weekly demand zone, DXY expects to turn upward, awaiting the Federal Funds Rate results at this month's FOMC meeting. If it rises from the weekly demand zone and moves above the red resistance line again, the big upside could continue for several weeks. Conversely, if it fails to rise near the red resistance line and turns down again, the monthly correction process is highly likely. If so, the decline could continue until it finds a bottom near the monthly demand zone.
For reference, if DXY succeeds in rebounding in the weekly demand zone, then EURUSD will fall below 1.0 in the weekly supply zone, resulting in a big drop.
So, please take a good look at the chart changes according to tomorrow's CPI results and next week's FOMC meeting results.
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