DXY Price Analysis: Bears in charge eyeing a break of 91 level
- The US dollar is under pressure at the start of the week.
- Bears seeking downside extension towards weekly support.
The greenback has been pressured due to the US elections and prospects of additional stimulus.
However, the price has been in freefall and a correction can be expected from a technical standpoint.
The following offers a top-down analysis and the scope for a correction before a downside correction towards the weekly support.
Monthly chart
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The price is down to test a monthly support structure that happens to meet long-term trendline support.
However, depending on where the trendline is drawn, bears may take the view that a more reliable trendline is as follows:
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This has been tested more times and can be considered more reliable.
Significantly, it has acted as a counter-trend line resisted on a retest.
Weekly chart
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The retest of the trendline printed a 50% mean reversion, offering an extra layer of confluence to the downside case for the dollar.
Daily chart
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From a daily perspective, a correction can be expected at this level of support from which either a 38.2% or somewhere close to a 60% retracement meeting prior structures could equate to the next leg lower.
The first target that the bears might consider would be a -272% Fibonacci of the weekly bullish correction.
4-hour chart
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However, technical conditions still remain bearish, so there is no confirmation that the downside is not still in play.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
