Dollar Index can pause into quarter-end ahead of PCE

Gregor Horvat Wavetraders

Good morning everyone. We have seen EURUSD hit a new low of the year, just before most dollar pairs have pulled back a little bit, which may have something to do with repositioning into the end of the month and quarter, especially ahead of important US data later at 2:30 p.m. Central European time. We are also seeing some pullback in crude oil as Qatar pushes for further talks between Washington and Tehran.

Dollar Index channel support break chart

Looking at the Dollar Index, we can see that price is now breaking the channel support, suggesting that we could be stepping into a higher-degree ABC correction. As mentioned before, after such an extended move higher since the September 9 Fed rate hike, some slowdown would be totally normal. If we now get a three-wave pullback, this could eventually offer a new opportunity to join the broader bullish dollar trend, with important support around 100.00–100.60.

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Author

Gregor Horvat

Wavetraders

Experience Grega is based in Slovenia and has been in the Forex market since 2003.

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