The bounce is looking like a larger retracement
The trendline on the Dollar Index isn't exactly textbook but combine it with the inverted head-and-shoulders and the crowded dollar-short position and there's a compelling case that this is more than a bounce.
We've been wrestling with that question all week and at some point you need to make a decision. I have been highlighting support in NZD/USD, EUR/USD, cable and gold. They've all broken.
So the question to ask now is probably: How high will the dollar bounce?
Using that DXY chart (full disclosure: I'm not a DXY fan), the initial target is 96.00.
The pace of the move could certainly slow but the implication is that it's only half over.
