USD rally stalls at resistance, pullback and breakout pending?

The US dollar index (DXY) posted three solid days of gains between Thursday and Monday. I cannot say I am overly surprised to see A Doji formed yesterday given the resistance cluster around 103.50 which includes a previous support zone, trend resistance and the 50-day EMA. But we also had a change in sentiment for markets yesterday that were eager for a decisively hawkish message from Jerome Powell, which was not delivered. Therefore I suspect the US dollar needs a pullback or period of consolidation before its next leg higher. And I maintain my view that the US dollar remains oversold, and there is more upside on the horizon after its initial pullback is complete.

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It's played out like clockwork; nice pullback into suggested support area, ahead of the anticipated break.

Onwards and upwards?

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Onwards and upwards indeed. A slew of economic data and hawkish Fed speech after the Feb meeting (and now slightly hawkish FOMC minutes) suggests the US dollar remains oversold to our eyes.

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