It's been a long time that i've posted anything in FF. with the current pandemic, there's not a lot to do other than sit in front of a system and speculate at least for someone like me who has been in the markets for donkeys years lol.
anyway ... starting with DXY,
with the trump admin gone almost... and the arrival of legitimate vaccine, dollar has finally put it's head out of the hole that it's been since march of last year. although, i do not believe that dollar is still out of the woods yet, but for a short term (3 months), we will definitely get a correction to 38.2 of the entire bear run.
Presumably it's only starting out now. Minor wave endings will be going on with small corrections to the downside (prompting people to buy other pairs). it would be better to sell rallies of corresponding us dollar pairs like gbp/usd, eur/usd and buying pairs like usd/cad and usd/chf on dips. I generally use Forex Performance (finviz.com) to see the strength of currencies just before London open. you can see this at Today's Trending Forex Markets - Barchart.com as well.
Here is a chart of US dollar index on 4 hr. I believe that us dollar is in a big corrective move at least to 94.. maybe a tad more.. need some more data to paint a picture with some accuracy. with a high of 90.91, it seems to have completed the 1st wave of wave A on Jan 18th. The second wave may have completed with a low of 90.00 on Jan 21st. as there was an ABC correction clearly shown on the chart.The possibility of 1st wave of minor wave 3 also seems completed with 5 waves up and according to me there will be a 3 wave correction to the downside to maybe 90.28 ( 50% fib of wave 1 and also sma 200 on 4hr). could also come down to 90.22 ( 38.2 of fib retracement). could be even lower as wave 2 is known for it notoriety to retrace upto wave 1 as well.
My strategy is to start selling small the majors from 90.28 all the way to the bottom.
According to this weeks performance on majors, the worst are CHF, AUD, GBP, EUR. so once index reaches 90.28 or lower, i will buy usdchf, and sell aud/usd, gbp/usd and eur/usd until wave 3 is finished. Good luck ... here is the chart