Since the end of January, the Dollar has seen unexpectedly high performance. After weeks, struggling beneath 90.000, the Dollar was able to consolidate between the 90 to 91 levels, before being able to finally break out past 91. However, the Dollar may have overextended and now a major correction is in play.
Despite news of the better than expected data in regards to the treasury yields pushing the Dollar to a high of 91.602, we now see a potential correction. On Friday, the Dollar closed at around 50% fibonnacci retracement levels. However, it may continue further into the 61.8% retracement levels before finally rebounding.
The US Dollar Index (DXY) indicates the relative strength of the US Dollar in comparison to a basket of currencies it runs up against. In recent weeks, the US Dollar has proven resilient in face of investor optimism. With the current dip, this may pose as a major correction to the growing uptrend.