Late January proved exceptionally volatile in the currency markets, as reflected by the ATR indicator. However, following the rebound from the four-year low (B), price swings on the DXY chart have narrowed, suggesting a degree of market stabilisation.
Friday’s CPI release had the potential to trigger sharp moves in the US dollar index, yet no major surprises emerged. According to Forex Factory data, the actual figures were broadly in line with analysts’ forecasts (inflation eased slightly as expected), and market participants headed into the long weekend, with US financial markets closed on Monday for Presidents’ Day.
Technical Analysis of the DXY Chart
On 27 January, when analysing the Dollar Index (DXY) chart, we:
- → updated the descending channel (marked in red);
- → noted that DXY was trading near a long-term support zone from which price had rebounded twice in the…
