DXY Daily Chart Analysis – Will DXY Return to the Bull Channel?
DXY finally broke out of the bull channel it has been in since July of this year. A strong bull response off of the 30EMA brought the price back to the bull channel. We are now waiting to see if the price can re-enter the channel or if it fails and confirms a breakout to the downside.
1. Bear breakout of the Bull Channel, waiting for confirmation
2. Strong bull response on 30EMA below the channel
3. Price is currently testing the channel
4. RSI is near 50 and is not supportive of either direction
5. Before trading DXY, wait to see if the price confirms or denies a breakout
Since we are in a bull trend, the probability of a confirmed breakout to the downside is less than the trend continuing to the upside. I think it is best to wait for a Daily close within the bull channel before entering a long or a bear candle closing near its low below the 30EMA before shorting. The bias ought to remain bull until we have confirmation of a break to the downside.
As always, trade at your own risk, you are responsible for your trades. I hope this analysis was insightful and useful.
Trade wisely and let us know what you think in the comment section below!