DXY can break soon the key diagonal of resistance and start a strong rally up for the next weeks.

DXY Weekly chart

Today we will analyze the current placement of the US dollar, what we can expect for the next weeks and how that will influence the markets.

For now, DXY is finding support at 20MA Weekly and for the last two weeks DXY consolidated sideways. 

Looking at the bigger picture we can see the big bullish flag and inside we have a falling wedge. Considering thjose two bullish patterns and the fact that DXY now is getting close to test the top of the falling wedge (104,726) we can project a possible break above the diagonal resistance and a continuation above into the 108-108-84 level. This theory will be invalidated if the DXY will loose the 103.25 level of support.

The target for the big falling wedge could be the top of the bull flag and that will be in the 110 area.

If the above scenario will play out we can expect a big correction for BTC, US100, S&P500 and the rest of the big players.

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In conclusion, we must keep an eye at the 103.25 support level and 104.195 resistance level. Moving and closing above 104.726 level, DXY might start a strong rally up. Losing the 103.250 level of support, we might see DXY going lower into the next levels of support.

Note: Check your broker chart and see the price level difference. This is just my opinion and it is not meant to be a signal or financial advice. Trade safe and manage your risk.

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