Is the Dollar Rally Starting to Run Out of Steam?
The US Dollar Index (DXY) strengthened again for the second consecutive day on Wednesday (September 3rd), approaching a key resistance area above 98.65. However, signs of hesitation are beginning to emerge, indicated by the long shadows on the 4-hour candlesticks. Currently, the price is testing the 98.65–98.85 resistance range, which is quite difficult to penetrate.
Fundamentally, market conditions still support the dollar as investors tend to be cautious amid the sell-off in global government bonds. However, US economic data due today is expected to show further economic weakness. If the results meet expectations, market focus could return to the Fed's actions and potentially hinder the dollar's rally.
Technically, the DXY has reached the top of its descending channel at 98.60. Attempts to break through this level were stalled, with the next hurdles being the highs of August 27 (98.75) and August 21 (98.85). If successfully surpassed, the next target is 99.10, the peak of August 5th.
However, technical indicators are starting to show signs of weakness. The 4-hour Relative Strength Index (RSI) is starting to turn lower, although it remains in bullish territory, while the MACD is showing weakening momentum. If a correction occurs, the nearest support is at 98.05, followed by 97.55, before finally testing the trendline support around 97.35. (ayu)
Source: Newsmaker.id
