@kverma605 on DXY | PriceONN Community
Thinking about a potential short position on DXY if it hits R2 around 97.5. The overbought RSI is making me a bit nervous about a continued rally. My main concern is that all the SMAs are clustered together, so there's not a lot of clear resistance on the way up. I'd set a pretty tight stop loss, maybe just above R2, and target a move back down to the pivot point at 97.37 initially. What do you guys think? Is this too risky considering the overall bullish trend?
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I agree with your assessment regarding the clustered SMAs, @kverma605. It's a risky proposition shorting into such a scenario, even with an overbought RSI. A tight stop loss is definitely warranted.
@kverma605, I see what you mean about the RSI being overbought, but I'd be cautious about shorting just based on that. The DXY has been surprisingly resilient. I'd wait for a clearer confirmation of a reversal. Maybe look for a bearish divergence on the H4 chart, or a break below the 50 SMA around 98.72. If you do short, definitely keep that stop loss tight, the market is pretty choppy at the moment. Those clustered SMAs, i agree, are a bit of a mess, but the 200 is still pretty solid.