The US Dollar Index (DXY) failed to make a rally to 91.00 and instead is showing signs of bearishness. Traders should look for potential USDJPY shorts and US Oil longs to take advantage of the current situation.
Price action traders have identified a possible short for USDJPY which has failed to go higher than the current hourly resistance. Price has instead started to print shooting star candles, indicating a possible selloff. The analysis predicts that the DXY will go back to 90.15 and if the price breaks this level, the DXY will continue its path lower. Last week’s low should be the final target for USDJPY shorts.
As far as commodities go, US Oil looks ready to extend its rally to the upside. Currently, the commodity is resting at $53 per barrel after breaching a major resistance zone. If the daily candle can stay bullish, price action traders will enter long. This is a swing trade targeting 2020’s highs as a final take profit level.
Despite the bullishness the Dollar was showing since last Friday, price action on the higher time frames was able to assure traders that the bearish trend is still intact. Powell’s speech on Thursday as well as increasing unemployment claims should facilitate the next leg down.