The U.S. Dollar Index (DXY) has been pulling back since the September 28 High. Technically it has been trading within a long-term Bullish Megaphone pattern since the start of the year. Today the price hit the 1D MA50 (blue trend-line) for the first time since August 15. With the 1D RSI approaching the 41.00 Support, which has formed 3 out of the 4 total Lows of the Megaphone, this is starting to align major markers for a long-term buy that targets the next .382 Fibonacci extension in line, the 5.382 at 118.00.
For us it would be best to enter after confirmation as the selling pressure from the bond yields is strong and that confirmation can be given after the MACD makes a Bullish Cross. Until then it would be best to stay on the sidelines. As you see the Megaphone's bottom (Higher Lows trend-line) is considerably lower than then 1D MA50 this time.
We are only willing to sell if the price breaks below the 1D MA100 (green trend-line), which is slightly below the bottom (Higher Lows trend-line) of the Megaphone, giving us good tolerance levels hence a solid confirmation. In that case we will be targeting the 1D MA200 (orange trend-line).
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