Overnight, Fed Chair Jerome Powell surprised markets with his comments that "the bigger mistake remains not getting rates high enough" and that "the US economy has been stronger than expected".
These hawkish comments spurred market anticipation that the Fed is not done with the current rate hike cycle, lead to a sharp increase in the DXY.
The DXY broke out of the consolidation, first testing the short-term 50% fib retracement level (105.35) before rising to consolidate just under the 106 round number level and at the 50% fib retracement level from the longer term.
While the DXY could retrace briefly to retest the 105.65 level, look for the price to climb and break above the 106 level to trade higher toward 106.25
These hawkish comments spurred market anticipation that the Fed is not done with the current rate hike cycle, lead to a sharp increase in the DXY.
The DXY broke out of the consolidation, first testing the short-term 50% fib retracement level (105.35) before rising to consolidate just under the 106 round number level and at the 50% fib retracement level from the longer term.
While the DXY could retrace briefly to retest the 105.65 level, look for the price to climb and break above the 106 level to trade higher toward 106.25
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