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.
