- The daily chart of the dollar index (DXY) shows a head-and-shoulders breakdown – a bearish reversal pattern- which indicates the rally from the February low of 88.25 has likely ended and the bears are back in a commanding position.
- However, the breakdown could be a trap as the greenback tends to perform well in the fourth quarter.
- More importantly, the 10-year treasury yield printed a four-month high of 3.06 percent and could revisit yearly high of 3.13 percent, now that it has found acceptance above key resistance of 3.02 percent (July high).
Daily chart
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Spot Rate: 94.55
Daily High: 94.69
Daily Low: 94.53
Trend: Cautiously bearish
R1: 94.66 (neckline hurdle)
R2: 95.00 (Sept. 14 high)
R3: 95.50-95.60 (multiple daily highs)
Support
S1: 94.30 (previous day’s low)
S2: 94.00 (psychological support)
S3: 93.71 (July 9 low)
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