NEXT LEG LOWER FOR THE DOLLAR!

2021 saw the U.S. dollar strengthen in anticipation of the Federal Reserve potentially raising interest rates, a possibility which became a reality yesterday as up to 3 hikes were announced to take place in 2022!
BUY THE RUMOUR, SELL THE FACT!


FUNDAMENTALS:
The odds that the Federal Reserve can successfully reduce its balance sheet to even pre-2020 levels with the amount of global debt in existence is precisely 0%.
A controlled deflation would crash every leveraged market in existence and precipitate an unprecedentedly large financial crisis.
It is possible that the Federal Reserve will hike its official rate while continuing to inject trillions in permanent and temporary liquidity, essentially bailing out the financial system and global economy from the consequences of these higher interest rates.

TECHNICALS:
The DXY is over-extended from both its 50-day and 200-day moving averages, and is primed for a correction.
The DXY is encountering heavy resistance at the 0.5 FIB level, and has printed FOUR DOJIS on the weekly chart, an extremely rare and reliable signal of a pending reversal.
DXY volatility is extremely low and is primed for a reversal, which is a bearish signal.