DXY Trading within the "zone"

DXY

The US dollar experienced a significant surge in its exchange rate, marking its most substantial rally in ten months. The sudden rise can be attributed to doubts among traders regarding the extent of the Federal Reserve rate cuts that had been previously factored into the market. Furthermore, the current geopolitical climate has heightened demand for the dollar as a safe-haven currency, contributing to its recent success.

On Tuesday, the Dollar Spot Index exhibited a significant increase of 0.8%, marking its most substantial surge since March. The US dollar demonstrated pronounced strength against all major currencies worldwide, resulting in the index's closure at its highest level since December 13th. This remarkable development in the market signifies a positive outlook for the US economy amidst the ongoing pandemic challenges. The surge in the index reflects the investors' confidence in the US economy and the Federal Reserve's commitment to ensuring a stable currency. The rise in the index also indicates a possible shift in the financial market's preferences towards the US dollar as a safe haven amidst the current global economic instability.

The price rejection observed within the specified zone is in perfect alignment with the analysis conducted. In order to add to our position, it is advisable to wait for a pullback to the 101.917 area. If the price continues to remain stable, there is a high possibility of a retest of the previous high.

We could also see a rejection at the 38.2 level on the Fib.