Dollar index bullish breakout

Jun 26, 2023

Dollar index saw a sharp rally previous week and we saw some retracement in the index on friday, however we are now seeing another round of rally and this time is looks like a consolidation pattern is being formed and the breakout from the pattern will be bearish for bullion and even equities. The index took support from the pivot level and then is bouncing up which confirms the trend more. There is likely to be more pressure if we see the breakout sustain, this is also coming after a significant rate hike by the ECB last week which was a bit of a surprise. Despite that the pound did not gain significantly against the dollar which means the market participants are anticipating the fed to also raise the rates in line with the ECB decision. Overall it will be interesting to see if the index holds up above these levels. If it does so for a period of time a sharp rally cannot be ruled out. Any forex pair will have to be traded keeping the same in mind.