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Oversold US Dollar Isn’t Exactly Bullish

Jul 23, 2020 · 1 min read

By Kevin Kelly, CFA

The latest drop in the US Dollar Index (DXY) has pushed the currency benchmark into oversold territory for the first time since early June, but that doesn’t mean a rapid reversal is on the horizon. Over the last 25 years, the DXY continued to decline 64% of the time in the 14 days following an oversold reading on its 14-day RSI. Extending the time horizon doesn’t help much either; the DXY was positive just 39% and 41% of the time in the subsequent 30 and 60 days, respectively, over the same period.