We're once again at a crossroads for the dollar index. We know that the fed taper will start in mid november which is overall bullish for the pair but it is mostly priced in and the supply of dollar is still on a upward trajectory until mid next year. The channel structure is still intact and it is our bias that it will need to break the bottom of the channel to liquidate longs before it can move up to reach higher highs.
BEAR CASE
A mild correction from here and more downside to test the bottom of the channel at 92.566.
BULL CASE
A larger correction may occur to form a bull trap but ultimately, we're biased to the downside for Q4 2021 and Q1 2022
BEAR CASE
A mild correction from here and more downside to test the bottom of the channel at 92.566.
BULL CASE
A larger correction may occur to form a bull trap but ultimately, we're biased to the downside for Q4 2021 and Q1 2022