The plunge comes in the backdrop of traders rising-rate cut odds by the Fed in March meeting.

The dollar remained on the downward trajectory and finally traced out a medium-term top via a double top pattern formation (weekly chart). The USDX settled with losses for the third-day losses this week so far. Traders started to raising Fed rate cut odds as concerns over coronavirus outbreak impacting global economic growth refused to fade away.

Moody’s Analytics said, “As inferred from the CME Group’s FedWatch Tool, the futures market recently assigned an implied probability of 59% to a March 18 rate cut, which was up considerably from February 20’s 9% implied probability.”.

Technically, the dollar index forms a double top, and we are watching at the support located at 97.35 and 95.90 levels. A double top pattern is a bearish reversal pattern, which occurs at the high end of a trend. On February 27, the index decisively breached its 20MA, placed at 98.50, and closed at 98.00.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

What is your Technical View?

Do you have a different idea? Please leave us a comment and get an answer from our professional analysts.