US Dollar Sinks in November: Can Greenback Find Support Before 2023 Ends?
In November, the dollar index experienced a correction as bullish momentum waned. The greenback eventually breached the range between 105 and 107 that had persisted throughout October.
Finding a balance around the 103 levels, the DXY rebounded marginally from a crucial support zone, recuperating from a nearly 4% dip in the previous month.
Analyzing the daily chart, the DXY experienced a descent below its pivotal support at an average of 105.3.
The downward trajectory extended to the Fibonacci 0.618 level relative to the recent uptrend, witnessing a substantial rebound at this juncture, which aligns with an average of 102.5.
While acknowledging reactions at other Fibonacci retracement levels corresponding to 104.2 and 103.4 during the November downturn, the most decisive response emerged at the Fib 0.618 level.
Despite this, the overall trend appears to maintain a bearish stance. The Dollar Index, recovering from 102.5, is currently encountering resistance at 103.4, coupled with its 8-day EMA value, shaping this level as a dynamic barrier.
For a recovery in the dollar, the 103 region needs to be decisively crossed this week. Although a rebound at this point has the potential to carry the dollar index up to the 104.5 region, the index may encounter stiffer resistance at the 104.5 level and turn its direction down again.
On the other hand, the current trend remains valid that the weakening of the dollar may continue. This means that it will be difficult to break through the 103 band, while the DXY is more likely to test the 102.5 support once again. A possible breakout will accelerate the downtrend and we can see that the dollar may continue to weaken towards the 101 region.
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