General analysis of DXY index (measuring USD strength) on April 20, 2021:
- In yesterday's session, the DXY index had a strong decline day. The DXY index dropped from 91.72 to 91 points, and closed yesterday with a daily candle around 91 points. Observation combined with my analysis of DXY yesterday, we can see that DXY could not complete the favorable VDV pattern but went straight down.
- On the daily chart D1, we can see that the DXY index has broken the strong support zone around 91.3 points (this is also the neckline area of the positive VDV pattern). With DXY down sharply and there is no recovery like this, the DXY index is likely to always move to the next support zone of 90.2-90.6 points.
- When the price falls to this price range, this is also the area that touches the trendline channel that lasted from the beginning of the year until now (January 6, 21). Here in my opinion the downside momentum of the DXY index has weakened and there will appear buying pressure here. So in the beginning of today's session we can sell short with USD eg USD / XXX and buy short with pairs with USD behind eg XXX / USD, XAU / USD, EURUSD
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