The US dollar index suffered its most session close in nearly 3-weeks yesterday. Given its tendency to trade lower throughout April and signs of weakness at the highs, we’re keeping an eye out for a break lower to signal a near-term top.
Over the past 30 years, April has proven to be a tough month for the greenback which has closed lower 70% of the time. Furthermore, it has produced an average negative return over the past 5, 10, 15 and 30-years. Whilst these seasonal tendencies are not considered as predictive, it’s certainly something to keep in mind of bearish momentum returns.
On the daily chart, a bearish pinbar and spinning top doji warned of a hesitancy to retest March’s high. Yesterday’s bearish engulfing candle has knocked it firmly back down towards the week’s lows. A break beneath this week’s low (96.96) warns of further downside, so long as prices remain below this week’s high (97.52) first.
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