- USD (DXY) has pulled back to the SMA 50 (110.71), which is the first important area to watch, with short-term lateral support (110.25) just below it.
- USD is in an uptrend, consolidating the overbought spike in September.
- USD would still be in an uptrend if it were to take a big, contrarian pullback to the 38% Fib at 105. The major trend marker (SMA 200) is rising toward that level.
- But the first step to such a play, which would likely set the markets free to party for a while, would be for USD to lose 110 and then the next support shelf at 108.60.
- The fact that USD failed the test of the highs and turned down below the Sept. high seems to hint at a chance of further pullback. Meanwhile, it’s holding the uptrending SMA 50 and that is the driver at the moment.
