After being shorted for much of the week, the US Dollar Index (DXY) is expected to retrace back to 90.50 before possibly continuing its path lower.
Price action analysis of the Dollar is suggesting that the current downtrend may be put on pause, as the price is indicating a reluctance to move lower. For the past two days, the Dollar has been stuck in a range between 90.30 and 90.50. A push back to 90.50 may erase some of the gains made against the Dollar.
Traders will still be holding their longs for the majors as stops have been moved into profit. While the Dollar enjoys a day of bullishness, traders can shift their focus to AUDJPY. This pair is looking quite bullish on the higher time frames, and traders are looking to go long once today’s high is cleared.
Contrary to most Friday’s, tomorrow’s fundamental schedule is bleak. This should provide traders the luxury of holding their positions right until the 5:00 PM market closure. It would be ideal for the Dollar to have resumed its downtrend by then.