The Dollar Index (DXY) is positioned ominously. It is pressing towards another confrontation with its flattening 200-Day EMA, now at 96.75, heading into tomorrow’s ECB Meeting when Draghi is expected to acknowledge the need for more stimulus and/or negative rates.
Shouldn’t we think that the Dollar Index would exhibit a more buoyant set-up if the ECB continues to put pressure on rates while the Fed leaves another RATE HIKE on its table?
This is counter-intuitive.
Nonetheless, if DXY heads lower, breaks its 200-Day EMA, and presses towards a retest of the Feb 11 low at 95.24, the year-long topping formation will roll over into a much more serious and consequential set-up.
