The opening weeks of the trading year have not been good to the Greenback. A newly “flexible” FED and dovish overtones from policymakers have given rise to decisively bearish sentiment. Last December’s U.S. CPI numbers didn’t help the USD’s cause, coming in relatively flat. For the time being, grumblings of only one 2019 FED rate hike are growing louder and louder. March USD Index futures have got the message, falling decisively since New Year’s day.

Despite the negative sentiment, the March USD Index has put together a solid two-day rally from the 95.000 handle. A positive session close will run the win streak to three and position this market to challenge several key topside resistance levels.

March USD Index Futures

Over the past few weeks, I have talked in depth about the importance of the 95.000 level. Trade around this area has certainly been strong, driving price action since last Wednesday.

Here are the key levels facing this market:

• Resistance(1): 38% Current Wave Retracement, 95.370
• Support(1): Psyche Level, 95.000

Overview: Friday brought a hard test of the 38% Current Wave Retracement (95.370). As of press time, this market is trading below 95.370, a strong indication that the daily downtrend remains valid.

Thus far, it has been a quiet session for the USD, as shown by the tight range in the March USD Index. However, this is likely to change in the coming 24 hours. The U.K.’s Parliamentary Brexit Vote and the release of U.S. PPI (Jan.) are primed to shake things up.