The USD could drop deeper in the upcoming period versus all its rivals if the USDX will resume the corrective phase. USD will need strong support from the US economy to be able to increase again versus its rivals.
Some poor numbers will send the dollar towards new lows on the short term. USD posted little gains versus the Euro and versus the Yen in the last days, but this could be only a temporary rebound.
It is very interesting to see what will really happen in the upcoming days because you can see on the USDX’s daily chart that the rate has made a false breakdown below the sliding line (sl) of the ascending pitchfork and below the sliding line (SL) of the major descending pitchfork and now maybe is trying to retest the UML.
We have a false breakdown also below the upside 50% Fibonacci line of the descending pitchfork. I’ve told you in the previous days that only a false breakdown below these levels will invalidate a further drop. It remains to see what will happen because this could still be only a temporary rebound. I want to remind you that a valid breakdown below these levels will signal a further drop and the USD’s crash.
The next days could be crucial because it could drop much deeper if it stays below the upper median line of the minor red descending pitchfork.