#MarketNews #Dollar DOLLAR BOUNCES BACK AFTER RECORD FALL | Smart Forex Lab.
#MarketNews #Dollar
DOLLAR BOUNCES BACK AFTER RECORD FALL
On Tuesday, the dollar index fell by 1.3% - the biggest drop in 2 years, it occurred against the backdrop of a positive surge in the stock market. Today, on Wednesday, the index is recovering, but not confidently, partially winning back the fall of Tuesday.
How likely is it that the fall will resume?
On September 26-28, high-profile peaks were reached - maximums in 20 years. Intuitively, the dollar was overbought, and a pullback could be expected.
But there is another sign, more specific than intuition. These are volumes. They are extremely high (1) at the top, which indicates the activity of large players with important information. Surely they are busy adjusting their positions. Large volumes always appear at important market reversals, and therefore we can assume that the upward trend line (2), which has supported the market growth since the end of 2021, may be broken.
A confirming factor for this hypothesis may be a rebound of no more than 50% from the support zone (3) and declining volumes, which will indicate an exhaustion in demand.
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This forecast represents FXOpen Companies opinion only, it should not be construed as an offer, invitation or recommendation in respect to FXOpen Companies products and services or as financial advice.
