It’s been a dizzying drop for the dollar since falling through support last April.  This morning, it reached our next downside target from last June [see: All About the Dollar.]

Back then, DXY appeared likely to bounce sharply.  But, the bounce was short-lived, and DXY has failed several subsequent tests along the way.

Has it finally found lasting support, or is there more downside ahead?

continued for members…This is a .236 channel line.  They’re often meaningful, and this one could be as well.  But, the larger channel midline down around 88.682 (also the 1.272 extension) looks more significant.It’s easier to see on the weekly chart.With revised 2Q GDP coming out tomorrow and a very lively oil and gas market, I suspect DXY isn’t quite done.

But, we also have some pretty significant geopolitical events shaping up around the world.  Yesterday, North Korea launched a missile that flew directly over Japan airspace before crashing into the ocean.  Provocations like this could prompt a fear trade into the USD that could see it backtest the rising purple channel midline at the .618 of 96.465 — if it bounced.

Stay tuned.