The US Dollar Index (DXY) consolidated the latest 4-day rise, retreating on the back of bearish diverging hourly studies. The immediate uptrend, however, remains intact while prive-action remains supported by the 80.820 previous resistance pivot on a (daily) closing basis. In the event that 80.820 is breached to the downside, oversold dips that exhibit bullish intraday divergence should be accumulated between the 80.344/80.679 region, the 38.2% & 25% retracement of the latest advance. The counter-trend reversal should last no longer than a few days, thus if the 81.444 peak is not within reach by Thursday, then the current correction could persist through next week.
The EUR/USD formed a small-intraday base, allowing consolidation of the latest steep drop to take hold. Bullish diverging hourly studies triggered a corrective rally that probed the former swing low at 1.2970. The bearish structure is firmly intact while price-action remains capped by this former pivot on a closing basis. In the event that 1.2970 is broken cleanly to the upside, a move could emerge into the 1.3013/1.3087 region (25% & 38.2% retracements of the latest decline). Short positions should be initiated if accommodated by bearish diverging hourly studies. Meanwhile, the Euro Index (EXY) failed to reach the targeted 102.78/103.18 region, which suggests the completion of a five-wave decline. The single currency, however, remains bearish while below the previous swing at the 105 figure.
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