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There are 4 US major economic releases remaining this week but the US Dollar has been sold heavily after a dovish FOMC statement with willingness to cut rates three times this year.
Inflation is still there but in my honest personal opinion, the Fed is more political than fixing the US economy.
The US Dollar depicted by the DXY index has continued an upward trajectory after ending its 23-day down trend last March 8.
In light of the Greenback’s recent sell-off, the index remains stronger macro-economically with the Fed continued battle against inflation and expected unchanged rates.
However, the FOMC statement is negative and the general markets has feasted upon it.
With an on-going geo-political tension through a potential Russian-Ukraine conflict expansion across the Europe, majority will sell stocks at the right time.
The US bond yields have eased today but tend to rise through a reawakening Dollar and may help sustain the newfound 12-day up trend.
Trade Plan
During mid week, the DXY index has successfully broke out on the weekly and re-tested above the 200-day SMA but lose it again.
There’s a strong rejecting pin bar on the weekly.
At time of writing this article, DXY is ranging intraday but after finding the long term 23.60% fib level as a support, it may re-test the lost 200-day SMA again at least!
The US dollar is a victim of buy rumors and sell news but I remain a buyer for now.
Its recent drop is a clear and clean pull back.
After confirming a nearby flipped S/R, I will enter a new long position through these orders:
Buy Entry: 103.45
Stop Loss: 103.15
Take Profit: 103.90
Risk to Reward Ratio: 1.50
Conclusion
I’m targeting the 4H 200-SMA as take profit while setting up the stop loss below intraday’s low.
Good luck.
Trading involves risk.
