The USD index (DXY) is on plan to the October 28 update that stated…
One option could be for a pop to the top of the channel, which would be in keeping with this oh so predictable (logical, at least thus far) 2022 market. USD could bounce in line with pro-USD, pro-Fed hawk, anti-asset market sentiment and drop again later. It’s a process, remember. An ultimate downside target – if this were to turn out to be a top of some kind – would be the 105 area. That is the major daily uptrend marker (orange SMA 200).
and…
Another option is that it is a bull flag forming. If that were the case the short-term downtrend could drag on for an indefinite period of time before a new surge in the bull market. In that case maybe 108 would contain the pullback.
USD is unresolved between the two options noted above. It will either lose the lower flag trend line and support at 108 or it will hold and shoot upward again, per its ‘bull flag’ status.
The hint leaning USD to the downside is the Gold/Silver ratio, which is now in breakdown mode after losing the SMA 200 (orange) for a second time and ticking a new low.
Now it’s up to the markets and I suppose to a degree, the noise of the elections to finish informing the short-term. A breakdown in USD and GSR would indicate Q4-Q1 relief we’ve been noting potential for. A recovery per USD’s bull flag and a bounce in GSR would likely bring a disruption, at least, to the party. But as of now, GSR is pressuring USD’s stance.
