Facts:
- USDIDX is consolidating below the lower boundary of the sideways trend from the past three years.
- Euphoria in equity markets has reset the RSI and MACD indicators.
Recommendation:
Short position at market price
- TP: 98.700; 98.000
- SL: 100.500
Opinion:
The USDIDX index is currently in a consolidation phase below the lower boundary of the broad sideways trend it has followed for the past three years, suggesting potential for further dollar depreciation. The surge of euphoria in equity markets, driven by hopes of swift trade deals between the U.S. and key partners, has triggered a temporary sentiment rebound, which led to a cooldown in the MACD and RSI indicators, with RSI rising from oversold levels to around 42 points.
However, the fundamentals behind this optimism may be fragile and premature, posing a risk of renewed selling in the stock market and a potential reversal in sentiment. In this context, dollar weakness persisting despite the rally in risk assets may indicate low demand for the U.S. currency, supporting the scenario of further USDIDX declines and thus justifying a short position.
Methodology
The recommendation is based on both macroeconomic analysis and technical analysis of the USDIDX chart. Target levels were determined using classic support and resistance zones and Price Action analysis.
