Jan 7th DXY still controlled by the bears

Jan 7

Observing the current trend in the DXY (US Dollar Currency Index) for the week, it appears poised to revisit the low established on December 28th, aligning with last week's price action. The previous week saw DXY establishing this low before a rally that aimed to fill the preceding week's bearish imbalance but ultimately faced rejection from this level. Anticipating a potential break of the existing market structure, there's a likelihood of continued downside movement, possibly breaching the low established in July 2023.

Technical indicators support this hypothesis: The MACD has recently crossed downward, reflecting in the printing of red bars, indicating a strengthening bearish momentum. Additionally, the RSI exhibited a notable divergence pattern and is currently trending downward, further reinforcing the bearish sentiment.

However, it's crucial to monitor the market closely, as a break and sustained position above the orange trend line would invalidate this projection. Such a move could signal a potential shift in the current bearish outlook. As always, trading decisions should consider multiple factors, and risk management remains essential in navigating potential market movements.