The dollar just cracked—and the market is now sitting at a pressure point.
The dollar finally gave way. A technical combination of resistance zones, a topping pattern, and signal-confirming indicators did exactly what they were supposed to: rejected price and triggered a textbook pullback. And now? Bulls and bears are wrestling over a critical zone and what happens next could set the tone for the rest of the week.
H1 Chart Insights
The bearish scenario we mapped out in Lab Note #21 played out to perfection - resistance held, the dollar turned, and we just printed fresh multi-week lows before the U.S. session even opened.
The bounce from the 127.2% Fibonacci extension + lower border of the red declining channel makes sense… but let’s be clear: it’s weak - at least for now. Price hasn’t even reclaimed 38.2% of the latest drop, which means bulls have nothing to celebrate yet.
Until 99.08 is breached, the upper line of the red downtrend channel remains out of reach and bears remain in control.
Bearish Targets (if 98.80 breaks):
- 98.61 -> the 38.2% Fibonacci retracement of the entire September–November bull run
- 98.42 = 127.2% Fibonacci extension of the Nov. 13–20 swing (watch this closely - previous pivot zone from late October)
- 98.20 -> measured move from potential channel breakdown + pro-bullish gap low from Oct. 20 (still open = key support)
Bullish Recovery? Here’s What They Need to Do:
- hold above yesterday’s low
- break 99.08 (the mentioned 38.2% of the last drop)
- close today’s the pro-bearish gap: 99.23–99.30 (layered with 61.8% retracement, which serves now as the major battleground)
Only then can they even think about reclaiming the red channel’s upper edge.
My takeaway: today is not about taking sides - it’s about watching what happens at the edges:
- if we lose the current (major) green support zone + red channel bottom -> bears may press this into 98.20 territory
- if bulls reclaim 99.08 and eat through the gap? -> quick squeeze into 99.40–99.50 not out of the question
- don’t trade the middle and let the zone decide
One More Thing to Watch
This is a bigger-picture signal that shouldn’t be forgotten:
The dollar is still trading below the broken rising wedge structure on the daily chart. If bulls fail to defend the green support zone, the wedge breakdown scenario could come alive with a potential move all the way to 97.61, where the wedge’s measured target intersects a still-open bullish gap from early October.
If that gets triggered, it's not just a pullback. It's a regime shift.
Stay sharp and let the daily candle speak.
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Anna
Trading Lab Founder